Distress without Bankruptcy: An Emerging Market Perspective
China is representative of many emerging markets in that its bankruptcy law and enforcement is weak and institutional background remains under-developed. Taking advantage of the countrys regional variations in government quality and financial development, we are interested in understanding what mechanisms influence distressed firm behavior in emerging markets. We find that institutional background matters considerably. Distressed firms facing relatively weak institutional background (i.e. state-owned firms, firms from areas with poorer government quality and/or more backward financial development) display poorer operating performance, more aggressive capital structure and investment policy, and ultimately lower recovery likelihood. The results are robust for both state-owned firms and private firms, and hold in a host of robustness tests. Our findings provide novel evidence on how augmenting institutional factors discipline distressed firm behavior in an emerging market environment where bankruptcy law enforcement and creditor monitoring are weak.
Joseph P.H. Fan Jun Huang Ning Zhu
The Chinese University of Hong Kong Shanghai University of Finance and Economics University of California,Davis
国际会议
大连
英文
1-62
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）