An empirical research on the relevance of ownership structure and financial distress in listed corporations

This paper does the empirical research on the relevance of ownership structure and financial distress in listed companies based on the data of ST corporations because of abnormal financial positions in year 2005-2009 and the paired corporations. The ownership structure is described by the nature of controlling shareholder, ownership centralization, ownership balancing and managements´ holding percentage. The result shows that the possibility of financial distress is significantly lower in stated owned firms than in private firms, while other factors of ownership structure don´t have significant impact on financial distress occurrence. It also suggests that the model based on financial ratios and ownership structure variables can predict a corporation´s financial distress very well.