An Empirical Study Of The Expansion Of Enterprise Financial Crisis

Along with the integration of the global economic, companies are facing to theincreasingly competitive environment. The common pursuit of most Chineseenterprises is to seek survival and development through expansion. As the financialcrisis company growing, the financial problems in enterprise expansion areincreasingly highlighted.This paper bases on the Survival factor theory, combine the enterprise failurecases in China, exploring the relations between the features of expansive companyand corporate financial crisis, economy cycle fluctuation and corporate financialcrisis, industrial factors and corporate financial crisis by logistic panel data model(random effect). The content mainly includes four parts:The first part reviews the relations between corporate features and corporatefinancial crisis, economy cycle fluctuation and corporate financial crisis, industrialfactor and corporate financial crisis, aims to find out ideas and the frame by cardingthe current research, which pave the path to study the influence factors of expansivecorporate financial crisis.The second part comb the definition of expensive enterprises, ways and specialfinancial activities in the first; Secondly, combine the failure cases to explore theinfluence of its occurring financial crisis by the expensive corporate features, andreach financial characteristic parameters; Thirdly, analyze the relations betweeneconomy cycle fluctuation and corporate financial crisis in the basis of the drivingfactors of the economy cycle. Finally illustrate that the industrial factor is alsoimportant determinants to the probability of expensive corporate financial crisisoccurrence by the two sides of industrial policy and the types of industrycompetition.The third part is empirical analysis upon the expensive corporate financial crisis.This part explore the influence of its occurring financial crisis by the expensive corporate features, economy cycle fluctuation and industrial factor by logistic paneldata model(random effect), adopting listed expensive companies in2005-2010as thesample, taking negative net operative cash flow after deducting interest expense asthe sign of corporate financial crisis. In selecting indicators, this article chooses thefinancial indicators to represent expensive corporate features; measure economycycle fluctuation through GDP real growth rate and industrial enterprise the totalassets contribution rate; take12industries to represent industrial factor. Theempirical results show the expensive corporate features and industrial factor havesignificant effects to the probability of expensive corporate financial crisisoccurrence, also show that the probability of expensive corporate financial crisisoccurrence have significant negative correlation with economy cycle fluctuation.The fourth part is policy suggestion which prevent expensive company fromfinancial crisis. This part bases on expensive corporate features, economy cyclefluctuation and industrial factor, then gives some appropriate policy suggestions.