Corporate investment during the financial crisis: Evidence from China

Hong, Bo; Driver, Ciarán; Lin, Hsiang-Chun Michael

doi:10.1016/j.irfa.2014.07.002

Cited by 36 publications

(29 citation statements)

References 30 publications

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“…(2) The electricity demand of six provinces were under great shock of the financial crisis, and the random impulse effect of the secondary industry performed more intensely. (3) Since the second half of 2009, the impact of the financial crisis on electricity demand in North China was gradually weakened. The random impact of the social electricity consumption in North China reduced from´0.1407 in February 2009 to´0.0188 in June 2009, and the proportion declined from´0.8979% to´0.1189%.…”

Section: Discussionmentioning

confidence: 99%

“…With the outbreak and spread of the international financial crisis in 2008, the emergence of many issues, such as the reduction of international orders and the frustration of investment and trading confidence, has caused a great negative impact on the real economy of China [1][2][3]. It can be obviously seen from the reduction of external demand, the falling of total import and export, and the decline of economic growth rate, which also led to the reduction of energy consumption [4].…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Financial Crisis on Electricity Demand: A Case Study of North China

Zhao

Guo

et al. 2016

Energies

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The electricity consumption and economic growth are highly correlated. The financial crisis in 2008 brought a negative effect on China's economic growth, which also influenced the electricity consumption. The electricity demand of North China region was also greatly influenced by this financial crisis, the whole social electricity consumption growth rate of which decreased by 14.31% in 2008 compared to that in 2007. In order to analyze the random impulse effect of the financial crisis on the demand of electricity in North China, the monthly data is decomposed into deterministic trend, stochastic impact effect, and periodic trend using the Beveridge-Nelson decomposition method. After comparatively analyzing the impulse effect of the financial crisis on electricity consumption of six provinces in North China, we can draw the conclusions: (1) the electricity consumption of the whole society and the secondary industry are under larger negative impacts, and the random impulse effect of the secondary industry is more intense; and (2) the impact of the financial crisis on the tertiary industry, which is mainly influenced by seasonal changes, is smaller. Finally, some policy implications are proposed.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Impact of Financial Crisis on Electricity Demand: A Case Study of North China

Zhao

Guo

et al. 2016

Energies

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“…Past studies has shown that investment declined over these crisis periods [4] [5]. In the meantime, Bo [15] also found that the financial crisis affected the corporate investment negatively, whereas state controlled firms were less. Moreover, financial distress also affects investment in a different manner, depending on investment opportunities available in the firms [16].…”

Section: Introductionmentioning

confidence: 91%

The Financial Crisis Impact on Firm Performance, Financial Decision and Corporate Governance of Indonesia Listed Firms

Muchtar¹,

Ngurah²,

Nor³

et al. 2019

Proceedings of the Proceedings of the 1st Workshop on Multidisciplinary and Its Applications Part 1, WMA-01 2018, 19-20 January

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The purpose of this study is to investigate the impact of global financial crisis on firm performance, financial decision and corporate governance of the Indonesian listed firms. The financial data are retrieved from Reuters Data stream and annual reports for 212 firms over the period 2003-2013. Hence, the data is a balanced panel data with 2332 observations. The impacts of the financial crises on the research variables are tested using a special two-way cell-means (ANOVA) model of each of the research variables by Time-Period, and Sectors. The factor Time-Period (TP) has three levels, namely before, during and after crises, respectively and the factor Sector has two levels; Manufacturing and Service sectors respectively. The findings of cell-mean parameter show that market performance (TOBINS_Q) is lower during crisis period compared to before and after crisis period, indicating the mean parameters are significantly greater than its mean during the crisis period for both sectors. Meanwhile, accounting performance (ROA) appears to have lower mean parameter during crisis period compared to after crisis. However, based on the coefficient of firm performance, the impact of financial crisis is more on the market performance and less on the accounting performance. The findings also show that investment is lower during crisis period compared to before and after crisis period, while leverage is lower during crisis compared to before crisis period for both sectors. Interestingly, the results show that financial crisis had no impact on dividend per share, while free cash flow and corporate governance are less impacted by the financial crisis. This study extends the current understanding of firm performance, financial decision and corporate governance by providing new empirical evidence of the impact of financial crisis by sector.

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“… Bo et al (2014) point to another dimension of heterogeneity, namely country-specific economic institutions. They revealed that, during the GFC, state-controlled firms in China significantly increased their investment in financial assets, whereas non-state firms did not because the Chinese Government's large-scale economic stimulus package together with the state-dominated financial system allowed state-controlled firms to invest in these assets with high expected capital gains.…”

Section: Introductionmentioning

confidence: 99%

“…In 2008, China and Vietnam had much higher real GDP growth rates compared with advanced economies and Emerging and Developing Europe. As Bo et al (2014) included real estate investment in financial investment in their empirical analysis, it is natural in the Vietnamese context to classify speculative investments in financial assets and real estate assets into one category and investment in investors' own production capacities into another. While Bo et al (2014) analyzed the data of listed firms in China, the present paper focuses on MSMEs, which constitute the vast majority of both formally registered firms and informal firms in Vietnam, in order to investigate whether these ordinary firms—as opposed to state-controlled firms—increased financial investment during the economic downturn.…”

Section: Introductionmentioning

confidence: 99%

Investment behavior of MSMEs during the downturn periods: Empirical evidence from Vietnam

Trinh

Morgan

Sonobe

2020

Emerging Markets Review

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Corporate investment during the financial crisis: Evidence from China

Cited by 36 publications

References 30 publications

The Impact of Financial Crisis on Electricity Demand: A Case Study of North China

The Impact of Financial Crisis on Electricity Demand: A Case Study of North China

The Financial Crisis Impact on Firm Performance, Financial Decision and Corporate Governance of Indonesia Listed Firms

Investment behavior of MSMEs during the downturn periods: Empirical evidence from Vietnam

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