近日，市值超过5亿美元的两家中国公司中国传媒(China Media)和中国农业科技股份有限公司(China Agritech)被纳斯达克(Nasdaq)摘牌，被控欺诈。元桥,2013)。这些案例严重影响了新浪和百度等股票的下跌。随着公司信心的增强，股票下跌。正如2008年发生的那样，由于缺乏信心，中国股市下跌了90%。这些股票的下跌为中国上市公司所导致的财务杠杆为这些公司所带来，因此最终与中国的杠杆效应有关。
The hypothesis that the overall financial leverage may lead to the overall leverage impact had been given by Christie (1982) and Black (1976) based on large firm’s data. This research is focused on large sample of more than 50 Chinese listed companies from various industries or sectors. These companies have IPOs from 2002 to 2015 and belong to various sectors like some of the basic industries, capital goods, consumer services, health care, finance and other public utility services and technology. In China, all these companies are going through all these financial leverage situations to get debt or equity trading to grow or to buy required assets . There has been an exploration on the corporate governance in China. It has also did the establishment of the state owned enterprises reform. Moreover, it has also led to the growth of the private enterprises.
It is heard today that the biggest economic risk in China are property prices and food inflation, but one of the important challenge in China these days is problematic or lax corporate government which is being less attention yet. Corporate governance ensures that the companies are running properly. In last few years, few companies went public in the country of United States because of the process which was known as the ‘Reverse Take Over’ (RTO) and were also slashed with the allegation of fraud.
Recently, two Chinese companies China Media and China Agritech having market capitalization of over US $500 Million were delisted from Nasdaq accusing as fraudulent (Yuan, Y., &Motohashi, 2013). These cases have impacted badly in declining in stocks like SINA and Baidu. As confidence goes among the companies, the stock decline. As it happened during 2008, Chinese stock value declined by 90% due to lack of confidence. These stocks decline for the Chinese listed companies lead for financial leverage for these companies, and hence ultimately is related to leverage effect in China.