Empirical Study Of The Relations Among Board Structure, Related Party Transactions And Corporate Financial Distress

How to predict business failure and whether it make a turnaround become the common concerned topic of both the theoretical and practical fields. How to predict financial distress is of great significance:first of all, it's an important reference for investors; secondly, it can remind the governance layer of financial distress and take measures to avoid further deterioration of the situation; thirdly, it offers early warning indexes for creditors, especially for the credit management of the commercial bank. It can also help the securities regulatory authorities to develop effective methods to stabilizing the market.This paper summarizes and analyzes the development and the recent research condition of foreign and domestic financial distress prediction theories and methods. Based on this, the research analyzes the influence of financial distress from two angles:board structure and related transaction. This paper select four variables from both governance structure of the board and financial difficulties, and putting forward hypothesis. On this basis, this paper selected companies in financial distress (ST companies) and the matching companies between 2008 and 2009 as the samples, using descriptive analysis, t test, logit analysis to analyze the correlation and affinity degree among the three. The regression structure shows that, the relations between board structure and financial distress is remarkable, the relations between related transaction and financial distress is relatively remarkable, the relations between related transaction and board structure is commonly remarkable. This paper offers advise for companies in financial difficulty based on the result.