The Research on Management in Bad Debt Risk Incorporating Macroeconomic Factors: Empirical Evidence from Chinese Listed Manufacturing Companies
- Ting Liu
- Corresponding Author
- Ting Liu
Available Online August 2016.
- https://doi.org/10.2991/icassr-15.2016.11How to use a DOI?
- Macroeconomic factors; Accounts receivable; Bad debt risk
- Modeling credit and default risk has been a surge since Moody’s KMV mode is proposed during the past two decades and non-financial factors incorporating fluctuation of capital market and macroeconomic status are taken into account in the subsequent research. Despite these notable efforts, few studies numerically reveal the impact that macroeconomic conditions have on the corporate bad debt risk. In this paper, bad debt provision ratio predicts corporate bad debt risk and the panel data of 501 listed manufacturing companies over the period 2004-2013 is used in the fixed-effects model verified by Hausman test to examine the numerical correlation. The model takes both financial ratios and prevailing macroeconomic factors such as GDP growth index, loan interest rate and their lagged terms into account. It shows that corporate bad debt provision ratio is significantly negative correlated with GDP growth index and is significantly positive associated with loan interest rate, which conforms to the replacement of the commercial credit financing theory and provides evidence to manage bad debt risk better in different status.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Ting Liu PY - 2016/08 DA - 2016/08 TI - The Research on Management in Bad Debt Risk Incorporating Macroeconomic Factors: Empirical Evidence from Chinese Listed Manufacturing Companies BT - 3d International Conference on Applied Social Science Research (ICASSR 2015) PB - Atlantis Press UR - https://doi.org/10.2991/icassr-15.2016.11 DO - https://doi.org/10.2991/icassr-15.2016.11 ID - Liu2016/08 ER -