The Empirical Research On The Relationship Of Corporate Governance And Financial Distress

Financial distress of listed companies is forecast has been a hot academic research, but at first,most of the studies were limited to the use of accounting information, almost did not take into account the area of corporate governance issues. However,in recent years both at home and abroad a large number of studies on the relationship of corporate governance and corporate performance relationship show that corporate governance has significantly affected the performance of the companies. Therefore,it is necessary to study corporate governance as the company’s financial distress from a different angle.At beginning,the article defines the concept of corporate governance and studies the reasons why produce corporate governance,the principal-agent theory is the reason.Next, the article defines the concept of financial distress and studies the reasons why the listed companies get into financial distress,the corporate governance perhaps a deep-seated reason. There for our study focus on corporate governance.We analyze the reasons of finaneial distress from six aspects that are the ownership structure,the board features,the board of supervisors features,the efficiency of corporate governance,the excitatio mechanism and the external corporate governance.Then the article put forward thirteen related assumptions and we consider the preceding three years dates of228ST companies in2006-2010and matched684non-ST companies as the researeh object to built a Logistic regression model.Our research indieates that the proportion of corporate shares,the ownership concentration and the opinion of audit are negatively related to the financial distress;the assets occupying from principle shareholders,the proportion of independent director, the frequency of board meeting, CEO dualit and the ratio of management expense are positively related to the financial distres; the proportion of state-ownered stock, the size of the board of supervisors system, the frequency of board of supervisors system meetings and the proportion of director ownership have no remarkable relationship with financial distress.At the last, based on the above empirical study and the actual circumstance of the listed companies,the article provides some advices about corporate goverance.