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| Macroeconomic Policy, Financial Resource Allocation and the High Leverage Ratio of Enterprises Sector |
| WANG Yuwei, SHENG Tianxiang, ZHOU Geng
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Department of Economics, Nanjing University;
Department of Finance, Nanjing Agricultural University |
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Abstract As the overall level of debt of China increases, it's more and more expected that the enterprise sector should decrease its financial leverage. However, according to the statistics, increase of debt to assets ratio of the company is not sufficient to explain the significant increase of the high leverage of enterprise sector. Based on empirical study of listed companies, this paper identifies that main reason for significant increase of the high leverage of enterprise sector is financial resources had been allocated disproportionately to companies with low value added ratio and low asset turnover since 2008, which caused by misallocation in ownership and industry. Therefore, the reform of the financial supply front is the key to debt risk prevention.
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Received: 12 May 2017
Published: 01 January 1900
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