The Empirical Research Of Factors Affecting The ST Company Finance And Duration In China

ST（Special Treatment）system, as a kind of regulatory means in the securitiesmarket, differentiates the companies in financial crisis from the well-run ones. Inrecent years, more and more listed companies are put on the “ST” hat, which meantheir financial statues are different from the normal operations. At the same time, STsystem brings great pressure to the listed companies, for if they don’t improve theiroperating performances as soon as possible, they will have to lose the listedqualifications. Therefore, most ST companies will take a series of measures to takeoff the “ST” hat. The research into the financial situations of the ST companies beforeand after they are put on the “ST” hat and the factors influencing ST duration willhelp not only investors understand ST companies better and make the right decisions,but also enterprises choose the right means to improve their operation performances.Demonstrative method is used in this paper. This article analyzed two aspects,the cause of special treatment and the relationship between ST duration and itsinfluencing factors, The whole essay was divided into three parts: The first partillustrated the purpose and significance of the research, by summarizing domestic andforeign studies about companies in financial distress and introducing the ST systemand the related methods ST companies used to turn round. The second part is themain body of this article. First,83ST companies and83corresponding non STcompanies in Shenzhen A securities market from2007-2012were selected as samples,using descriptive statistics analysis and binary choice model to analyze ten financialindex data, the result are when the operating conditions are not good, the long-termdebt paying ability become lower, total asset utilization efficiency reduces, thecompanies are vulnerable to become ST companies. Next,86ST companies inShenzhen A securities market were analyzed with the duration regression model toinvestigate the relationship between ST duration and turnaround method. Theconclusions are as follows: the increase of the money for assets reorganization cansignificantly shortened the ST duration; the influence of related transaction on theduration comes next; the effect of government subsidies is relatively small. The last part of the paper put forward some suggestions to the listed companies, investors andgovernment according to the research results.