Research On The Root Cause Of "Zombie" State Owned Enterprises’ Credit Debt Default

Since the first substantial default of credit bonds in China’s capital market in 2014-the "11Super Day Bond",credit bond default events have occurred frequently in China.While bringing huge negative impacts to the credit bond market,it has also greatly infringed on the interests of investors,with Yongmei Group’s credit bond default being a typical example.Since 2020,the default entities in China’s credit bond market have shifted from low ratings to high ratings,the centre of amortization was moved from the private sector to a government agency,showing a trend of disorderly expansion.The default of credit bonds is currently showing a normalized development trend.Based on this background,this article studies the influencing factors of Chinese zombie state-owned enterprises defaulting on credit bonds,constructs a corporate default model,identifies the default characteristics and patterns of zombie state-owned enterprise credit bonds,and has high practical application value for both credit bond investors and enterprises themselves.This study combines case study and model analysis methods,with Yongmei Group as the research object,to analyze and summarize the influencing factors of default,aiming to identify the root causes of default of "zombie" state-owned enterprises and provide suggestions for their development difficulties,Promote good development commercial bonds and credit markets..This article conducts in-depth research on the relevant theories of credit bond defaults.Guided by rent-seeking theory,information asymmetry theory,principal-agent theory,and financial distress theory,In line with the clear background and purpose of this study,significance of the influencing factors of credit bond defaults in zombie state-owned enterprises,it systematically adopts literature research,case analysis,and empirical research methods for research.This article first reviews the development history and default situation of Yongmei Group’s credit bonds.Based on this,this study combines qualitative and quantitative research to explore the common influencing factors of zombie state-owned enterprise credit debt default behavior.Firstly,by reading literature,various factors that may lead to credit bond default behavior were analyzed from a general theoretical perspective.The second is to select 13 variables related to economic environment,industry attributes,company main characteristics,and company financial structure and condition,and analyze and organize relevant data.Using the method of logistic linear regression analysis,empirical tests were conducted on several parts of the theoretical analysis,and conclusions were drawn on the common factors that affect the default of zombie state-owned enterprise credit bonds;Once again,based on the previous empirical results,an empirical study was conducted on the default event of Yongmei Group,the first company with an initial rating of AAA,to explore the causes of its credit bond default.Finally,the research results of this paper were summarized and analyzed,we offer recommendations from the perspective of regulators,issuers and brokers.Through the above research,we hope to provide assistance for enterprises to prevent credit risks.This paper concludes that regional economic development,industrial nature,and corporate attributes have an impact on credit bond default behavior;The default behavior of enterprise credit debt is also affected by enterprise development strategy,internal governance and financial status.Financial indicators such as asset liability ratio and net return on assets of enterprises can give early warning to risks;The rating of credit bond entities in China cannot accurately reflect the risk situation of enterprises,and the quality of enterprise information disclosure urgently needs to be strengthened.