Financial Market Friction and Corporate Restructuring Activities in China

Shuangyan Li, Chang Liu, Mingbo Zheng, Chun-Ping Chang and Qiang Fu

Emerging Markets Finance and Trade, 2021, vol. 57, issue 14, 4089-4104

Abstract: This study empirically investigates the effect of external financial market friction on restructuring activities, based on panel data of listed Chinese firms from 2004 to 2018. The results show that there is a positive correlation between financial market friction and the number of restructuring deals. We also find that high financial market friction increases preference for cash payments and the likelihood of mergers and acquisitions. These findings add to the restructuring literature by capturing heterogenous restructuring forms. They also deepen the understanding of the firm boundary theory, by suggesting that firms have incentives to increase their scopes when facing external market distress.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2020.1801409 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:emfitr:v:57:y:2021:i:14:p:4089-4104

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2020.1801409

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().