Financial Distress: Correlationship With Capital Structure And Corporate Governance

The focus of the financial study has always been adjustingwith the development of financial market, during the infant ageof financial market, the wealth is the most scarce resource,suppliers of fund especially commercial bank played apredominant role, financial study accordingly centered on thestudies of monetary theory and policy, banking theory, andoperation and management of commercial bank. With the rapiddevelopment of productivity, the accumulation of wealth, thescare of fund have been effectively mitigated, demander of fundalternatively play an increasing active role in the financialmarket, It is not until then the attention shifted to the studyof financial market, corporate finance , asset pricing and soon.Since 1950's corporate finance has for a long time been thehotspot of the financial study, It is relatively lessfrequently to find the studies specializing on topic offinancial distress. Frankly, there are still many papers inthis field; a fairly complete survey on financial distress hasbeen given in the later text of my thesis. No surprise Consensusis rather difficult to find among different finance scholars,even in some basic aspect such as the concept and origin offinancial distress. It is more often than not to find that muchattention had been paid to predicting the occurrence offinancial distress paradoxically using data from corporatefinancial statement, Due to the fact that deterioratingfinancial data are actually the result of financial distress,one can't predict the happening of distress but diagnose thefinancial disease. Therefore, it is inappropriate to predictthe financial distress using financial data. Furthermore,there always exists a time lag in the disclosure of financialstatement, which also makes it impossible to forecast financialcrisis only through financial data. Innovatively noticing theintrinsic correlationship between financial distress and III财务困境及其与资本结构,治理结构的关系 Abstractcapital structure and corporate governance, I try to analyzethe financial distress from these characteristics inherent inthe corporate, especially in China. Capital structure is one of the eldest, one of the mostimportant, and one of the most attractive topics in finance,Since Miller and Modigliani established M&M theory in the1950's, many different theories on capital structure have beenevolving from their great work, moreover, in the 1970s, newcapital structure theory circumfusing with the theory ofproperty right, agent and asymmetry information came into being,carving out a prospective orientation in this field.The study of corporate governance can be traced back to AdamSmith (1776), while Berle and Means(1932)put forward the viewof separation between ownership and control power. Corporategovernance has now been drawing increasing interest inworldwide financial research. Combining financial distresswith capital structure and corporate governance in the paper,I try to explore a brand-new vision of financial distress study,i.e. the intrinsic linkage between the financial distress andcapital structure and corporate governance on the foundationof the earlier fruitful researches.The thesis can be divided into eight segments, the first sectionis the introduction, whose main aim is to give a descriptionof the background, method and framework of research object ;the next one is the chapter Ⅱ, the overview of financialdistress; the following three sections are the analysis aboutthe corporate internal characteristics, In the paper, a conciseanalysis is given about the theory of capital structure,corporate governance and their connections, chapter Ⅲ iscapital structure , which focus on capital structure'sintrinsic influence on financial distress , mainly from theviewpoint of relevance theory. And chapter Ⅳ is the review ofcorporate governance and its influence on financial distress.Part Ⅴ is the in...