The Research On China Listed Companies' Guarantee Behavior And Its Effect On Financial Status

With the development of Chinese stock market for over a decade, as a kind of normal operating measure, guarantee played a positive role to obtain capital for listed companies from banks conveniently and rapidly and to ensure the interest of financial institutions. However, in recent years, nonstandard guarantee has been a big problem that made listed companies in trouble. Some people regard the Chinese companies'external guarantee as"Goldbach conjecture of listed companies". At present, most researches describe external guarantee risks and harms by phenomena, which is lack of a comprehensive empirical study. This paper, regarding listed companies as the research object, discusses the origin of external guarantee and its influence on financial situation of listed companies by means of empirical method.Firstly, the paper describes the recent developing course of guarantee and makes a descriptive statistics of present guarantee characters in China. Then, based on the sample, listed companies which had got guarantee from 2001 to 2004 both in Shenzhen and Shanghai stock market, the author analyses deeply the effects of different guarantees by the Panel Data Model and makes a research whether different kinds of guarantees have different influences on enterprise's financial situation. Research shows that there is a serious moral hazard between listed companies and banks and a reverse choice problem within listed companies as soon as listed companies guarantee each other. Listed companies took the duty of recognizing and judging the risks which banks should have done. In some companies, if controlling shareholder has higher ratio of shares, the guarantee is in accord with the interest of whole company. But on the reverse aspect, the result is different. The character of controlling shareholder has inconspicuous effects on three types of guarantees of listed companies, and supervising policy plays an important role to standardize guarantee in some way. The financial situation of the companies that provide guarantee for the connected parties falls most remarkably, followed by those who provide guarantee to the non-connected parties and those who accept guarantee. it is totally in reverse to the overseas theory, that is, company's value can be added by guarantee.