Research On Influence Of External Corporate Governance On Financial Risk

The ministry of commerce research institute released the "2012 China’s non-financial listed companies financial security analysis report" in 2013. According to the report as of October 2012. There are 28.12% of companies in financial risk, financial security outstanding is only 1.36%, among surveyed 1689 non-financial listed companies. And the listed company’s overall financial security index set a minimum of four years. So our country enterprise is facing a serious financial risk.Therefore, financial risk become the focus of attention once again. As is known to all, corporate governance is the effective ways to restrain enterprise financial risk. But academic research lay particular stress on the relationship between company internal governance and financial risk, less research on the relationship between firm external governance and financial risk. However, external governance is an importa-nt part of corporate governance, only full of external management efficiency, internal governance would produce better benefits. Therefore, the author thinks that it is necessary to study from the perspective of external governance. Investigate whether the external governance in our country play a role of risk restrain and how effect?To solve above problems, this article from the literature review, theoretical analysis and empirical analysis to study. First of all, this paper introduces the resear-ch background and significance, and reviews the domestic and foreign research on external governance and financial risk present situation; Second, expounds the conc-ept of external governance and financial risk, and analyze the impact of external governance on financial risk from the principal-agent theory, the reputation theory, property rights theory and stakeholder theory. Then based on the theoretical analysis of corresponding hypotheses are proposed; finally, empirical analysis of influence of external corporate governance on financial risk and puts forward relevant policy Suggestions.This article selects the Shanghai and Shenzhen a-share listed companies in 2010 to 2012 as research samples, from product market competition, takeover market, manager market, creditor governance, governance and external audit and the financi- al risk governance of the six carries on the empirical research. The results show that: (1) The product market competition, manager market, external audit governance and government governance has significant inhibitory effect on financial risk; (2) There was no inhibition effect on financial risk when control in the control transfer market at the first year, but be more effective after a year; (3) At present, the bank creditors have no inhibition of financial risk.In addition, considering the special economic background, this paper further study of different nature of property rights of enterprises. Found that state-owned enterprises except that product market competition and the creditors failed to play a positive role in reduce financial risk and takeover market would reduce financial risk the next year, the others all play a positive effect. Except the creditors did not play a positive role in reducing financial risk, the rest all play the proper role among non-state-owned enterprises. Based on the research conclusion, and puts forward relevant policy suggestions.