Empirical Study On Default Factors Of Corporate Bond In China

China’s bond market has developed rapidly since its establishment.The domestic bond storage has become the second largest in the world which is only second to that of the United States.Whereas,the rapid expansion of the bond market is accompanied by default risk in the meanwhile.Since the outbreak of bond default phenomenon in2018,both the number and balance of bond defaults continue to refresh the past record till the end of 2020.The market is capable of distinguishing risky enterprises from steady enterprises spontaneously after the break of the rigid payment.But when bond default becomes a new normal,it will inevitably affect the confidence of investors which will finally lead to difficulties in financing for whole system.In the long run,it will have an adverse impact on the stable development of China’s economy.Thus,studying the influential factors of bond default in China is of vital importance.The thesis involves corporate bonds issued from 2008 to 2020 by all listed companies into sample to establish the Logit model and it is worth-noting that the model includes the latest real default data of the market.The model includes 19 indicators such as the company’s ownership,industry,shareholding ratio of major shareholders,bond rating,issuance scale,bond term,GDP of the province where the issuer is located,profit growth rate,total asset turnover rate and sales revenue growth rate as the model independent variables.The optimal model is derived through the verification of confusion matrix and ROC curve.According to the result,the following conclusions are derived.First,the bond default probability of state-owned enterprises is significantly lower than that of non-state-owned enterprises.Second,the bond default probability is differently distributed among different industries.Third,provinces with different economic environment will also affect the default risk of issuing bonds.And finally the classical financial indicators can also contribute to the study of corporate bond default risk.After getting the above conclusions,this thesis further discusses whether the influencing factors of bond default have changed in different levels of macroeconomic environments,and gets a positive answer for the assumption.With the increasing prosperity of China’s bond market and the gradual expansion of the scale of investors,this thesis provides corresponding policy suggestions according to the empirical results from the perspectives of regulators,credit rating agencies,securities companies,issuers themselves,investors and commercial banks to resolve the possible systemic risks caused by bond default.We hope to form a virtuous circle of thriving development of China’s bond market and provide some guiding significance for the prevention of bond default risk in the future.