System Environment, Right Separation Coefficient And Credit Risk

Bank loan is an important means of financing for enterprises, agency problems’ impacton the financing ability of listed companies has been a hot topic of corporate finance research.Since the1970s, the central tendency of the equity structure of listed companies is more andmore obvious. Changes in the structure of shareholding change the agent agency problemsand the core of corporate governance. The shareholding structure as the basis for enterprisemanagement leads to changes in motive of controlling right ultimate controller exercises andchanges in state of operation, so it will affect the behavior of bank loan.According to the agency theory, there is a serious agency problem between ultimatecontroller and Investors. Ultimate controller uses the controlling right to do tunnelingbehavior, embezzling the benefit of minority shareholders. In the pyramid structure, thehigher the separation level, the more the motivation of the controlling shareholder to transferthe wealth of the target company. Domestic foreign researchers mainly study on corporateperformance from the perspectives of the nature of firms’ ultimate controller and the Controltheory. The general conclusions are that the relationship of separation level and corporateperformance is negatively correlated, there are few researches on the relationship betweencredit risk and separation level. Previous studies have shown that the higher the separationlevel, the lower the performance level, the greater the performances function. The company’soperating state is an important basis for the bank credit decisions, to some extent, the newincreased loan can respond the enterprise credit risk. Based on separation level data in thecorporate pyramid structure, this paper attempts to provide a new perspective for the study oncompany administration and enrich the economic consequences of the separation level; bycombined internal control with the external system environment, in the hope of providingsome recommendations for corporate administration and the national macro-control.This paper based on the review of relevant research literature and the theoretical analysisof the relationship of ultimate controller nature and credit risk, further analyzes the impact ofsystem environment, and proposes hypotheses. this paper uses1069A-share listed companiesunbalanced panel-data and multiple linear regression model to study on the relationshipamong the separation level, credit risk, ultimate controller nature and external systemenvironment. This paper finds that: First, the greater separation level in Group pyramids, theless new bank loan, the higher company’s credit risk; Second, the nature of the state-owned enterprises can provide an implicit guarantee of bank loan, so that it can get more bank loan,credit risk becomes weaker and in the state-owned enterprises, the positive correlationbetween credit risk and separation level becomes weaker; Third, the better enterprise’sexternal system environment can reduce the positive correlation between credit risk andseparation level.On the basis of empirical research, this paper makes summaries. Firstly, the conclusionof the study is summarized, it analyzes whether the hypotheses is tested or not and somefactors that influences bank credit decisions. Secondly, it puts forward some feasiblesuggestions, companies should improve corporate governance and reduce credit risk; whenmaking credit decisions bank should take fully into account the factors that affect the risk ofdefault; countries should draw economic policies up and improve law mechanisms, only inthis way economy could be developed healthy. Finally, the inadequacies of the research aredescribed.