Financial Distress, Ownership Structure And Management Turnover

Financial distress is the enterprise fail to pay due debts or an economic phenomena, including technology on solvency causes of fund management failure and the bankruptcy of poor sense of insolvency due to the enterprise errors decision-making or bad business. Once the enterprise into financial distress, will be facing bankruptcy or reorganization two consequences, and the owner, the creditors and other stakeholders will suffer a great loss. And a perfect governance structure, especially perfect equity structure and effective management supervision mechanism is good drive of performance, it can effectively reduce the possibility of financial distress.This thesis take special processing enterprise as financial distress. Firstly analyzes financial distress, ownership structure and management turnover inner relation. Then, on the basis of theoretical analysis, this article empirically investigate the effect of financial distress on ownership structure and management turnover, which is based on financial distress listed company between 2000 and 2008.The study found:financial distress, make the ownership structure taken a significant change, and the frequency of company managers'change was significantly higher than the non-financial companies, and ownership structure and management of change are significantly affected by the corporate governance. Finally, this paper thinks, perfecting the ownership structure, managers supervise balance mechanism and functions of the board of directors have positive significance to the financial distress company to pull out of distress.