Research On The Contagion Effect Of Financial Liquidity Risk Under The Diversified M&A And Expansion Of HNA Group

In an enterprise group,the financial liquidity crisis is not only related to its own operating conditions,but also affected by other members of the group,that is,the financial liquidity risk of the enterprise group has a contagious effect.In recent years,many group companies have achieved diversified operations through leveraged mergers and acquisitions,and high debt has also brought greater financial liquidity risks to such group companies.How to avoid the spread of this financial liquidity risk among the members of the group has become a concern in recent years.Based on this,the problem studied in this article is the contagion effect of financial liquidity risks among members of an enterprise group under diversified operations.Through the research on the contagion path of the financial liquidity risk of enterprise groups,the internal law of the contagion of financial liquidity risk of enterprise groups is summarized,and measures to avoid this contagion effect are proposed.After the financial crisis of HNA Group broke out,many of its business sectors were affected,and many listed companies were suspended from trading.Therefore,this article uses HNA Group as a case company.The case study found that under the guidance of the diversified expansion strategy,the HNA Group,through the operation of the internal capital market,allowed the funds within the group to flow to the M&A leading enterprises,thus triggering the contagious effect of financial liquidity risks.In order to meet the financing requirements required for mergers and acquisitions,group members guarantee each other and generate compensation risks;and under the diversified mergers and acquisitions,enterprise capital allocation decision errors make the overall poor operating performance,dragging down the development of the company’s original advantageous business,and at the same time,The unsatisfactory operating performance also makes related companies use operating related transactions to occupy the funds of related parties.When the overall financial liquidity risk of an enterprise increases,the contagion effect will increase accordingly.Enterprises with better financial status in the group may inject funds and transfer benefits to other members of the group.In addition,the high concentration of corporate group equity and weak internal control make group members lack a barrier to isolate each other,which facilitates the manipulation of capital flows between group members by major shareholders,and further aggravates the contagious effect of financial liquidity risks.The innovation of this paper is mainly in the research on the contagion effect of the financial crisis of enterprise groups.Existing research believes that related party transactions are the main way of spreading financial liquidity risks within enterprise groups.This article uses research on related party transactions before and after the financial crisis of HNA Group to expose the financial liquidity risks among members of enterprise groups in the context of diversified operations.The inherent law of contagion provides specific guidance for enterprise groups that adopt diversified development strategies to avoid such risks.Diversified M&A strategy and follow-up business conditions are the key to determining the flow of funds and benefit transfer within the enterprise group,and are also the source of corporate financial liquidity risk contagion;the high concentration of corporate group equity and weak internal control are the keys to contagion of financial liquidity risk factor.Therefore,this article proposes the following two enlightenments:First,diversified mergers and acquisitions consider the benefits of mergers and acquisitions and their own financing level to improve the efficiency of internal capital allocation.Second,strengthen the overall management level of the enterprise.Third,strengthen the internal control system,standardize related transactions,and establish a barrier to the circulation of funds among internal members to ensure that the benefits of advantageous companies are not exploited.