The Time Dependence And Endogenousness Of The Bankruptcy Risk Of Listed Companies In China

II Bankruptcy risk refers to the risk arising from main economic assets is insufficient to cover its liabilities. Unlike the value of company or other traditional financial hot topics, early analysis and research around the risk of bankruptcy has been always countable. In front of maximizing corporate value, academics and practitioners are in the pursuit of corporate performance and corporate value. While bankruptcy risk, the fundamental problem of whether a company could continue to survive, is often ignored. Existing relevant literature about bankruptcy risk both in China and abroad is focused on how to measure and predict the risk of bankruptcy as well as how bankruptcy risks affect the company’s development. Most of the research study the risk of bankruptcy as explanatory variables or control variables in order to understand how it affects the value of the company. In addition, some other studies learn about banking bankruptcy risk probability and try to find out the establishment of a reliable early warning model. So specialized research learning about the risk of bankruptcy as explanatory variables used in the non-financial data company is still countable.In this paper, it selects Shanghai and Shenzhen A-share 2069 non-financial companies as study sample, selects annual and semi-annual panel data during in early 2003 to June 2015. Meanwhile, in this empirical study, individual fixed effects panel regression models were used in annual and semi-annual data. The most important, general changes over time of bankruptcy risk is carefully studied of listed companies. What’s more, under the condition of controlling 5 exogenous factors, asset-liability ratio, company size, growth rate of total assets, return on equity and earnings per share, which significantly affect the risk of bankruptcy, this paper examines the time effect of bankruptcy risk "if" still has endogenous characteristics. Finally, based on empirical regression results, it gives a reasonable economics’ conjecture. Positive results of different time-frequency data show: bankruptcy risks of listed companies do have significant time effect, that is, with the passage of time after company issued to market, the risk of bankruptcy firstly increased and then decreased whit an inverted U-shaped curve characteristics. And curve inflection point occurs around six years after the company public. Even after controlling for exogenous factors that affect the risk of bankruptcy, the empirical conclusion remains steady. It shows that exogenous shocks are not all the reasons that bankruptcy risks change over time, the risk of bankruptcy of listed companies do have endogenous time effect.