Corporate financial structure and output fluctuations: An empirical analysis of Chinese listed companies under the US subprime mortgage crisis

This paper combines latest research achievements of financial structure and financial crisis, with the use of Chinese listed companies´ data from 2007 to 2008, and examines the impact of companies´ different financial structure, especially the debt structure on their output during the subprime mortgage crisis by empirical study. The empirical results reveal that the change in output growth has remarkably negative correlation with debt to equity ratio and bank lending to debt ratio under the crisis. The crisis amplification through the credit channels has a much larger negative impact on output growth than the balance sheets effect. During the crisis period, there is a significantly positive correlation between the open market debt ratio of total debt and the variable in output growth ratio.