| The use of leverage has a huge impact on economic growth.An appropriate degree of leverage can help firm expand their scale and promote economic growth,while a high degree of leverage may lead to frequent credit default and risk accumulation,which cause the financial crisis.Chinese firms have exploded in debt accumulation focused on the non-financial corporate sector in recent years.Rising debt could increase the financial burden on enterprises and worsen their living conditions,as well as weaken the stability of the financial system and undermine the development of China’s economy.Based on the above background,most research on Chinese enterprise leverage focused on the macro level,there is little literature concentrated on the micro level.This thesis attempts to explain firm survival problems from the perspective of debt level of enterprises to help firms eliminate debt risks and improve their survivability on a micro level,as well as provide targeted measures and strategies for the implementation of the "de-leveraging" policy on a macro level.The thesis uses the Chinese industrial enterprise database and selects Chinese manufacturing enterprise data from 1998 to 2007 as sample.We describe the survival distribution and basic characteristics of Chinese manufacturing enterprises by using Kaplan-Meier survival function estimate.We exam the impact of firm leverage on firm survival by constructing the Cox proportional hazards model.Combined with the dual background of China’s transition economy and open economy we introduce firm heterogeneity factors into the survival model,and further investigate regulating effect of firm ownership and export status.The results show that the impact of enterprise leverage on enterprise survival varies with the level of leverage.For enterprises with low leverage,leverage ratio is positively correlated with survival probability,the rise in leverage ratio is conducive to the survival and development of the enterprise;for enterprises with high leverage,leverage ratio is negatively correlated with the survival probability.The rise in leverage ratio increase the death risks of the enterprise.Considering ownership and export status of enterprise,state-owned enterprises can reduce the negative effects of leverage on the survival probability.Compared with other firm export status,the probability of survival of firms that frequently enter and exit the export market is most sensitive to changes in leverage.Based on the above conclusions,the policy recommendations presented in this thesis are:First,corporate leverage has both positive and negative effect on the firm survival,firm leverage should be controlled at a reasonable level instead of being reduced to zero.Second,China should vigorously deal with high-leveraged state-owned enterprises with overcapacity and inefficiency and stop providing financing to "zombie" enterprises.Third,when formulating preferential policies for encouraging exports,we should pay attention to the stability and sustainability of export activities and reduce the cost burden on exporters. |
PDF Full Text Request