Financial Ecological Environment,Financial Distress And Debt Restructure

The debt financing of Listed Companies in poor management or investment projects is not ideal is likely to occur in the current cash flow to repay the debt principal and interest due,and gradually fall into financial difficulties.At this point,the timely and efficient solution to the financial difficulties of the listing Corporation in order to avoid bankruptcy to creditors and debtors to bring a major negative.Since the new bankruptcy law was revised in 2007,three statutory procedures have been redefined:bankruptcy liquidation,reorganization and(court)settlement.Because of the existence of the liquidation cost and the tax preference,the liquidation is not the best deal of the breach of contract.The restructuring process is complex,time-consuming,high cost,it is mainly applied to large enterprises in practice.Therefore,the settlement procedure is widely used in the real life by the financial distress enterprise.Reconciliation is debt restructuring.Debt restructuring can be divided into private debt restructuring and statutory debt restructuring according to the solution.Debt restructuring is the debtor's financial difficulties,creditors to make a concession of economic behavior,so by definition can estimate the financial distress and debt restructuring have a certain relationship,namely the emergence of financial distress is the premise of debt restructuring.On the definition of financial distress,domestic and foreign research has been a long time but there is no uniform conclusion.But from the perspective of the development trend of financial distress,the definition of financial distress based on cash flow and creditor's perspective is called the mainstream.Therefore,this paper from the cash flow difficult to repay maturing debt to define the company ran into financial difficulties,with the payment of debt repayment minus the cash at the end of the short-term borrowing and at the end of last year a year due in non current liabilities of absolute value to define the degree of financial distress.The financial distress of the financial distress of the degree of financial distress and the company's debt restructuring behavior directly linked to the discussion.At the same time,the institutional environment differences between China's regions are the main factors leading to the regional differences in China's economic activities.The debtor the regional financial ecological environment is to consider the comprehensive evaluation index of regional economy,politics,law and culture,the gap between different areas of financial ecological environment often represent the different regional economic development level,the government of local enterprises,the degree of control,local judicial environment.So as to be able to affect the financial distress of the region to solve the financial difficulties of choice.Therefore,the relationship between the degree of financial distress,the financial ecological environment and the debt restructuring has a symbiotic interaction between the three.In real life,the debt restructuring of the debt restructured company can be divided into two categories,one is the bank as the representative of the financial creditors,a class is represented by the supplier of non-financial creditors.Debtors and creditors of these two kinds of debt can be seen as the financing of debt and operating debt.The choice of debt restructuring to solve the financial difficulties of the debtor is bound to choose a debt restructuring with the financial creditors or non financial creditors to restructure the debt.The degree of financial distress of different companies and the difference between the financial ecological environment of the region will have different effects on the debtor's choice of debt restructuring.Two types of creditors have different coordination and bargaining power,bank creditors due to the continuous monitoring of debt covenants and collateral existence than other types of creditors more astute,which will reduce information asymmetry in the.So banks can grasp more information of the debtor enterprise,and make up the moral hazard and adverse selection problem under the information asymmetry.So the bank can participate in the company's private negotiation and debt restructuring extensively under the information advantage.From the point of view of two types of creditors of the cost of restructuring,the bank creditors and financial distress enterprises for debt restructuring is generally exempt interest,compound interest,penalty interest,the lifting of the corresponding pledge collateral or extend the term of the debt,so the bank does not lose the right to obtain the principal,so the bank interest relief sunk costs low and banks to assume the risk is relatively large,even though the financial difficulties of enterprises is so serious that cannot repay captital with interest.Banks can also use enterprise mortgage collateral to obtain a certain value of the compensation.Therefore,this paper from the point of view of the degree of financial difficulties of the debtor of based on the heterogeneity of debt creditors different coordination and negotiation skills,analysis of the debtor's financial distress on the company in financial distress to choose the object of debt reorganization,at the same time,in the research on relationship between investigate the degree of financial distress and debt restructuring of the object,and joined the financial ecological environment the system background,research different institutional background of financial distress and corporate debt restructuring object selection effects and different financial ecological environment,the relationship between the degree of financial distress and debt restructuring of the object would strengthened or weakened.In addition,the debt restructuring of the financial distress companies can also choose to carry out a private debt restructuring or court settlement.The financial distress degree of different companies and the difference of the financial ecological environment in the region will have different effects on the debtor's choice of debt restructuring.Based on the two ways of the heterogeneity of the debt restructuring costs,will contact degree of financial distress and the debtor can withstand the debt restructuring costs into account,the more,the more serious the degree of financial distress of listed companies,more difficult to bear the high cost of solving.Therefore,this paper analyzes the influence produced by the debtor's financial distress on the company's debt recombination pathway,,while also adding the background of financial ecological environment of this system,study the different system background of financial distress and corporate debt restructuring way influence.The degree of financial distress,financial ecological environment and debt restructuring,debt restructuring and creditors choose the way choice of theoretical analysis and empirical research,the results show that the degree of financial distress and debt restructuring,financial and private creditors choose debt restructuring way choice has significant positive correlation;the financial ecological environment and debt restructuring,financial type selection and private creditors debt restructuring approach has significant negative correlation;the results showed that in the financial ecological environment background of the system factors,financial distress,the financial ecological environment of different areas will have some impact on the relationship between financial distress and the degree of debt restructuring,debt restructuring and creditors selection the way,compared with the financial ecological environment in poor areas,a good financial ecological environment The positive correlation between the degree of financial distress of the debtor and the debt restructuring,the choice of financial creditors and the choice of private debt restructuring is weakened.Innovation of this paper has three main points:one is with the previous literature definition method of financial distress of different,this paper from the definition of financial distress theory of to cash flow angle of redefining the measure of the degree of financial distress.Two,most of the previous studies on the earnings management effect of debt restructuring,this paper mainly studies the direct relationship between debt restructuring and financial distress,and enrich the experience of financial distress.Three is to make up for the previous study of Chinese scholars blank,fine differentiation of debt restructuring,the object of debt restructuring and the choice of ways to study,enrich the experience of debt restructuring.Through the research degree of financial distress and financial ecological environment of debt restructuring occurred,creditors and debt recombination pathway between,there are conducive to financial distress company according to their degree of financial distress and the characteristics of the regional financial ecological environment,more easily reached agreement of creditors and debt recombination pathway,thus saving time and cost of financial distress to solve,in favor of corporate financial distress quickly get rid of the current financial distress,maintain the company's sustained and healthy development.