Financial Crisis Analysis of Evergrande Group from the Perspective of Game Theory
These authors contributed equally.
- DOI
- 10.2991/aebmr.k.220603.045How to use a DOI?
- Keywords
- Financial leverage; Game theory; Government; Evergrande Group
- Abstract
With the gradual implementation of the national deleveraging policy and changes in the internal business environment of enterprises, debt default events occur frequently, and many enterprises are facing a serious financial crisis. This paper takes Evergrande, a leading real estate enterprise, as the research object. We analyze the causes and effects of its financial crisis by studying its financial indicators and establish a game theory model to analyze the game between the government and enterprises, as well as the optimal solution for Evergrande to get out of the financial crisis. Studies show that the reasons for Evergrande’s debt default are blind expansion, high leverage ratio, insufficient cash flow management, and stricter national policies. To get out of the financial dilemma, Evergrande needs to rely on its own rescue and the synergies of investors, management, and government. At the same time, in order to avoid falling into financial difficulties, other enterprises need to be cautious about diversification, rationally control leverage ratio, and balance development speed. The government should adopt the policy of seeking progress while maintaining stability, continue to promote financial reform, and reduce financing costs of enterprises.
- Copyright
- © 2022 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article distributed under the CC BY-NC 4.0 license.
Cite this article
TY - CONF AU - Zexuan Wang AU - Kesu Ye AU - Dianying Zhu PY - 2022 DA - 2022/07/01 TI - Financial Crisis Analysis of Evergrande Group from the Perspective of Game Theory BT - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022) PB - Atlantis Press SP - 262 EP - 274 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.220603.045 DO - 10.2991/aebmr.k.220603.045 ID - Wang2022 ER -