SpringerLink
Log in

Survival tactics for distressed firms in emerging markets

  • Published:
Asia Pacific Journal of Management Aims and scope Submit manuscript

Abstract

Understanding how firms cope with economic crises is of great importance, particularly in this period of rising interest rates coupled with a severe pandemic crisis. This study conducts an empirical analysis of firms in distress based on a large firm-level panel dataset containing detailed micro-level information on Chinese manufacturing firms. We study economic distress rather than financial distress. Moreover, we identify survival tactics adopted by distressed firms and the factors driving their choice of tactics. We show that three particular survival tactics help distressed firms recover, namely, reliance on fixed assets, reliance on intangible assets, and cost reduction. Furthermore, we show the critical role of institutional development in emerging economies, where institutions include product markets, financial markets, and legal institutions.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Data Availability

The data is available upon request.

Notes

  1. Imprinting effects are particularly important for individuals in their early career experiences (Dickel et al., 2021; Kosse et al., 2020). Bai et al. (2020) and Simsek et al. (2015) found congruence between the formative environment and the subsequent working conditions.

  2. According to Sun and Tong (2003), two-thirds of SOEs were profitable in 2000, with a 140% increase in profits over 1999. However, much of this improvement was achieved by heavy government interventions, such as money injections, interest rate cuts, debt–equity swaps, and debt write-offs.

  3. In addition to the required board of directors and information disclosure, listed firms also face stringent government regulations. For example, the Company Law of China stipulates that a listed firm will become a special treatment firm if its net profits are negative or net asset per share is less than the book value of stock for two consecutive years. Furthermore, it will be unlisted if it continues to make a loss in the third year.

  4. This 2 + 1 sampling rule means that economically distressed firms are identified based on a panel from 2001 to 2006. However, the analysis on these firms’ survival tactics extends to 2007. Therefore, our data usage covers the period 2001–2007.

  5. The definition of the profitability dummy is opposite to that of the state dummy, which is for technical convenience when using an ordinal-choice model.

  6. The sales expenses were reported only after 2001; hence, this item has fewer observations than other items. In addition, with some data on income from new products missing, the number of observations for this item is also smaller.

  7. Our results are robust if we extend the period to 2007.

References

  • Aghion, P., Bloom, N., Blundell, R., Griffth, R., & Howitt, P. (2005). Competition and innovation: an inverted-U relationship. Quarterly Journal of Economics, 120(2), 701–728.

  • Allen, F., Qian, J., & Qian, M. (2005). Law, finance, and economic growth in China. Journal of Financial Economics, 77(1), 57–116.

    Article  Google Scholar 

  • Anderson, R. C., & Reeb, D. M. (2003). Founding-family ownership and firm performance: Evidence from the S&P 500. Journal of Finance, 58(3), 1301–1328.

    Article  Google Scholar 

  • Andrade, G., & Kaplan, S. N. (1998). How costly is financial (not economic) distress? Evidence from highly leveraged transactions that became distressed. Journal of Finance, 53(5), 1443–1493.

    Article  Google Scholar 

  • Babina, T. (2020). Destructive creation at work: How financial distress spurs entrepreneurship. Review of Financial Studies, 33, 4061–4101.

    Article  Google Scholar 

  • Bachas, P.; Brockmeyer, A. (2020). Using administrative tax data to understand the implications of COVID-19 (coronavirus) for formal firms. World Bank, April 15, blog.

  • Bai, X., Tsang, E. W., & **a, W. (2020). Domestic versus foreign listing: Does a CEO’s educational experience matter? Journal of Business Venturing, 35(1), 105906.

    Article  Google Scholar 

  • Bamford, C. E., Dean, T. J., & McDougall, P. P. (2000). An examination of the impact of initial founding conditions and decisions upon the performance of new bank start-ups. Journal of Business Venturing, 15(3), 253–277.

    Article  Google Scholar 

  • Banalieva, E. R., Eddleston, K. A., & Zellweger, T. M. (2015). When do family firms have an advantage in transitioning economies? Toward A dynamic institution-based view. Strategic Management Journal, 36, 1358–1377.

    Article  Google Scholar 

  • Barlevy, G. (2003). Credit market frictions and the allocation of resources over the business cycle. Journal of Monetary Economics, 50(8), 1795–1818.

    Article  Google Scholar 

  • Beck, T., Demirgüç-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to growth: Does firm size matter? Journal of Finance, 60(1), 137–177.

    Article  Google Scholar 

  • Bhattacharjee, A., & Han, J. (2014). Financial distress of Chinese firms: Microeconomic, macroeconomic and institutional influences. China Economic Review, 30, 244–262.

    Article  Google Scholar 

  • Boardman, A., & Vining, A. R. (1989). Ownership and performance in competitive environments: A comparison of the performance of private, mixed, and state-owned enterprises. Journal of Law and Economics, 32, 1–33.

    Article  Google Scholar 

  • Bosio, E., Djankov, S., Jolevski, F., Ramalho, R. (2020). Survival of firms during economic crisis. Policy research working paper 9239, World Bank.

  • Bradshaw, M., Liao, G., & Ma, M. S. (2013). State ownership, tax and political promotion: Evidence from China. Journal of Accounting and Economics, 2(1), 1–53.

    Google Scholar 

  • Brandt, L., & Li, H. (2003). Bank discrimination in transition economies: Ideology, information, or incentives? Journal of Comparative Economics, 31(3), 387–413.

    Article  Google Scholar 

  • Brandt, L., Tombe, T., & Zhu, X. (2013). Factor market distortions across time, space and sectors in China. Review of Economic Dynamics, 16(1), 39–58.

    Article  Google Scholar 

  • Brandt, L., Van Biesebroeck, J., & Zhang, Y. (2012). Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing. Journal of Development Economics, 97(2), 339–351.

    Article  Google Scholar 

  • Briciu, S., & Sas, F. (2009). The Crisis and the cost management. Annales Universitatis Apulensis Series Oeconomica, 11(1), 269–274.

    Google Scholar 

  • Briscoe, F., & Kellogg, K. (2011). The initial assignment effect: Local employer practices and positive career outcomes for flexible-work program users. American Sociological Review, 76, 291–319.

    Article  Google Scholar 

  • Bu, D., Zhang, C., & Lin, T. (2016). Will political promotion expectation decrease the pay gap in state-owned enterprises in China? China Journal of Accounting Studies, 4(1), 53–78.

    Article  Google Scholar 

  • Cao, X., Lemmon, M., Pan, X., Qian, M., & Tian, G. G. (2019). Political promotion, CEO incentives, and the relationship between pay and performance. Management Science, 65(7), 2947–2965.

    Article  Google Scholar 

  • Chaney, P. K., Faccio, M., & Parsley, D. (2011). The quality of accounting information in politically connected firms. Journal of Accounting and Economics, 51(1–2), 58–76.

    Article  Google Scholar 

  • Chen, S., Sun, Z., Tang, S., & Wu, D. (2011). Government intervention and investment efficiency: Evidence from China. Journal of Corporate Finance, 17(2), 259–271.

    Article  Google Scholar 

  • Child, J., & Tsai, T. (2005). The dynamic between firms’ environmental strategies and institutional constraints in emerging economies: Evidence from China and Taiwan. Journal of Management Studies, 42(1), 95–125.

    Article  Google Scholar 

  • Cho, H., Chung, J. R., & Kim, Y. J. (2021). Fixed asset revaluation and external financing during the financial crisis: Evidence from Korea. Pacific-Basin Finance Journal, 67, 1–17.

    Article  Google Scholar 

  • Claessens, S., Djankov, S., & Klapper, L. (2003). Resolution of corporate distress in East Asia. Journal of Empirical Finance, 10(1,2), 199–216.

    Article  Google Scholar 

  • Clarke, G. R. G., Cull, R., Kisunko, G. (2012). External finance and firm survival in the aftermath of the crisis. Policy research working paper, 6050, World Bank.

  • Cong, L. W., Gao, H., Ponticelli, J., & Yang, X. (2019). Credit allocation under economic stimulus: Evidence from China. The Review of Financial Studies, 32(9), 3412–3460.

    Article  Google Scholar 

  • Cowling, M., Liu, W., Ledger, A., & Zhang, N. (2015). What really happens to small and medium-sized enterprises in a global economic recession? UK evidence on sales and job dynamics. International Small Business Journal, 33(5), 488–513.

    Article  Google Scholar 

  • Cull, R., Li, W., Sun, B., & Xu, L. C. (2015). Government connections and financial constraints: Evidence from a large representative sample of Chinese firms. Journal of Corporate Finance, 32, 271–294.

    Article  Google Scholar 

  • Cull, R., & Xu, L. C. (2005). Institutions, ownership, and finance: The determinants of profit reinvestment among Chinese firms. Journal of Financial Economics, 77(1), 117–146.

    Article  Google Scholar 

  • Dai, W., Liu, Y., & Liao, M. (2018). How does entrepreneurs’ socialist imprinting shape their opportunity selection in transition economies? Evidence from China’s privately owned enterprises. International Entrepreneurial Management Journal, 14, 823–856.

    Google Scholar 

  • Daines, R. (2001). Does Delaware law improve firm value? Journal of Financial Economics, 62(3), 525–558.

    Article  Google Scholar 

  • Demirgüç-Kunt, A., & Maksimovic, V. (1999). Institutions, financial markets, and firm debt maturity. Journal of Financial Economics, 54, 295–336.

    Article  Google Scholar 

  • Dencker, J. C., & Gruber, M. (2015). The effects of opportunities and founder experience on new firm performance. Strategic Management Journal, 36(7), 1035–1052.

    Article  Google Scholar 

  • Denis, D. J., & Kruse, T. A. (2000). Managerial discipline and corporate restructuring following performance declines. Journal of Financial Economics, 55, 391–424.

    Article  Google Scholar 

  • Dewenter, K., & Malatesta, P. H. (2001). State-owned and privately owned firms: An empirical analysis of profitability, leverage, and labor intensity. American Economic Review, 91, 320–334.

    Article  Google Scholar 

  • Dickel, P., Sienknecht, M., & Hörisch, J. (2021). The early bird catches the worm: An empirical analysis of imprinting in social entrepreneurship. Journal of Business Economics, 91(2), 127–150.

    Article  Google Scholar 

  • Djankov, S., Qian, Y., Gérard, R., & Ekaterina, Z. (2006). Who are China’s entrepreneurs? American Economic Review, 96(2), 348–352.

    Article  Google Scholar 

  • Doidge, C., Karolyi, G. A., & Stulz, R. M. (2004). Why are foreign firms listed in the U.S. worth more? Journal of Financial Economics, 71(2), 205–238.

    Article  Google Scholar 

  • Ellul, A., Pagano, M., & Schivardi, F. (2018). Employment and wage insurance within firms: worldwide evidence. Review of Financial Studies, 31, 1298–1340.

    Article  Google Scholar 

  • Esteve-Pérez, S., & Manez-Castillejo, J. A. (2006). The resource-based theory of the firm and firm survival. Small Business Economics, 30, 231–249.

    Article  Google Scholar 

  • Fabiani, S., Lamo, A., Messina, J., Room, T. (2015). European firm adjustment during times of economic crisis. Working paper N0. 1778, European Central Bank.

  • Faccio, M., Masulis, R. W., McConnell, J. J. (2006). Political Connections and Corporate Bailouts. Journal of Finance, 2598–2635.

  • Fan, G., Wang, X.L., Zhu, H.P. (2006). NERI Index of Marketization of China’s Provinces 2006 Report. Economics Science Press.

  • Fan, J. P. H., Wong, T. J., & Zhang, T. (2007). Politically connected CEOs, corporate governance, and Post-IPO performance of China’s newly partially privatized firms. Journal of Financial Economics, 84(2), 330–357.

    Article  Google Scholar 

  • Fan, J.P.H., Huang, J., Zhu, L. (2009). Distress without Bankruptcy: An Emerging Market Perspective. Working Paper.

  • Fan, J. P. H., Huang, J., & Zhu, L. (2013). Institutions, ownership structures, and distress resolution in China. Journal of Corporate Finance, 23, 71–87.

    Article  Google Scholar 

  • Fiechter, P. (2011). Reclassification of financial assets under IAS 39: Impact on European banks’ financial statements. Accounting in Europe, 8, 49–67.

    Article  Google Scholar 

  • Giannetti, M. (2003). Do better institutions mitigate agency problem? Evidence from corporate finance choice. Journal of Financial and Quantitative Analysis, 38, 185–212.

    Article  Google Scholar 

  • Gilson, S. C. (1989). Management Turnover and Financial Distress. Journal of Financial Economics, 25, 241–262.

    Article  Google Scholar 

  • Gordon, R. H., & Li, W. (2003). Government as a discriminating monopolist in the financial market: The case of China. Journal of Public Economics, 87(2), 283–312.

    Article  Google Scholar 

  • Grossman, S. J., & Hart, O. D. (1982). Corporate financial structure and managerial incentives. In J. J. McCall (Ed.), The Economics of Information and Uncertainty (pp. 107–140). University of Chicago Press.

    Google Scholar 

  • Guo, D., Jiang, K., Kim, B. Y., & Xu, C. (2014). Political economy of private firms in China. Journal of Comparative Economics, 42(2), 286–303.

    Article  Google Scholar 

  • Guo, D., Jiang, K., Xu, C., & Yang, X. (2020). Clustering, growth and inequality in China. Journal of Economic Geography, 20(5), 1207–1239.

    Article  Google Scholar 

  • He, Y., Xu, L., & Yang, M. (2021). The impact of tunnelling on financial distress and resolution: Evidence from listed firms in China. International Journal of Finance & Economics, 26(2), 1773–1792.

    Article  Google Scholar 

  • Hopenhayn, H. (1992). Entry, Exit, and Firm Dynamics in Long Run Equilibrium. Econometrica, 60(5), 1127–1150.

    Article  Google Scholar 

  • Hotchkiss, E. S. (1995). Postbankruptcy performance and management turnover. Journal of Finance, 50(1), 3–21.

    Article  Google Scholar 

  • Hotchkiss, E., & Mooradian, R. (1997). Vulture Investors and the Market for Control of Distressed Firms. Journal of Financial Economics, 43, 401–432.

    Article  Google Scholar 

  • Hsieh, C.-T.; Ossa, R. (2015). A global view of productivity growth in China. National Bureau of Economic Research.

  • Jensen, M. C. (1986). Agency Cost Of Free Cash Flow, Corporate Finance, and Takeovers. American Economic Review, 76(2), 323–329.

    Google Scholar 

  • Jensen, M. C. (1989). Eclipse of the public corporation. Harvard Business Review, 5, 61–74.

    Google Scholar 

  • Jiang, K., Wang, S. (2021). Internal Labor Markets - Two Types of Promotion and Two Tiers of Salary - Theory and Evidence from China. Working Paper, HKUST.

  • John, K. L., Lang, H. P., & Netter, J. (1992). The Voluntary Restructuring of Large Firms in Response to Performance Decline. Journal of Finance, 47(3), 891–917.

    Article  Google Scholar 

  • Jostarndt, P., & Sautner, Z. (2008). Financial Distress, Corporate Control, and Management Turnover. Journal of Banking & Finance, 32, 2188–2204.

    Article  Google Scholar 

  • Jovanovic, B. (1982). Selection and the Evolution of Industry. Econometrica, 50(3), 649–670.

    Article  Google Scholar 

  • Kahl, M. (2002). Economic Distress, Financial Distress, and Dynamic Liquidation. Journal of Finance, LVI, I(1), 135–168.

    Article  Google Scholar 

  • Kang, J. K., & Shivdasani, A. (1997). Corporate restructuring during performance declines in Japan. Journal of Financial Economics, 46, 29–65.

    Article  Google Scholar 

  • Kazmier, L. J., & Pohl, N. F. (1984). Basic statistics for business and economics. McGraw-Hill.

    Google Scholar 

  • Kosse, F., Deckers, T., **er, P., Schildberg-Hörisch, H., & Falk, A. (2020). The formation of prosociality: Causal evidence on the role of social environment. Journal of Political Economy, 128(2), 434–467.

    Article  Google Scholar 

  • Kyriazidou, E. (1997). Estimation of panel data sample selection model. Econometrica, 65(6), 1335–1364.

    Article  Google Scholar 

  • La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and Finance. Journal of Political Economy, 106(6), 1113–1155.

    Article  Google Scholar 

  • La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (2000). Investor protection and corporate governance. Journal of Financial Economics, 58(1), 3–27.

    Article  Google Scholar 

  • Law Yearbook of China 1993–2001. Law Yearbook of China. China Law Press.

  • Lemmon, M. L., & Lins, K. V. (2003). Ownership Structure, Corporate Governance, and Firm Value: Evidence from the East Asian Financial Crisis. Journal of Finance, 58(4), 1445–1468.

    Article  Google Scholar 

  • Lemmon, M.L., Ma, Y.Y., Tashjian, E. (2009). Survival of the fittest? Financial and economic distress and restructuring outcomes in Chapter 11. Working Paper.

  • Li, D. D., & Jiang, F. H. (2006). Institutional entrepreneurs. American Economic Review, 96(2), 358–362.

    Article  Google Scholar 

  • Li, B., Pan, A., Xu, L., Liu, X., Qin, S. (2020). Imprinting and peer effects in acquiring state ownership: Evidence from private firms in China. Pacific-Basin Finance Journal, 61(C), Article 101337.

  • Ma, X., Tong, T. W., & Fitza, M. (2013). How much does subnational region matter to foreign subsidiary performance? Evidence from Fortune Global 500 Corporations’ investment in China. Journal of International Business Studies, 44(1), 66–87.

    Article  Google Scholar 

  • Mathias, B. D., Williams, D. W., & Smith, A. R. (2015). Entrepreneurial inception. The role of imprinting in entrepreneurial action. Journal of Business Venturing, 30, 11–28.

    Article  Google Scholar 

  • McConnell, J. J., & Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial Economics, 27(2), 595–612.

    Article  Google Scholar 

  • Megginson, W. L., Nash, R. C., & Randenborgh, M. V. (1994). The financial and operating performance of newly privatized firms: An international empirical analysis. Journal of Finance, 49, 403–452.

    Article  Google Scholar 

  • Melitz, M. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica, 71(6), 1695–1725.

    Article  Google Scholar 

  • Melitz, M., & Ottaviano, G. I. P. (2008). Market Size, Trade, and Productivity. Review of Economic Studies, 75(1), 295–316.

    Article  Google Scholar 

  • Meyer, K. E., & Peng, M. W. (2005). Probing theoretically into Central and Eastern Europe: Transactions, resources, and institutions. Journal of International Business Studies, 36(6), 600–621.

    Article  Google Scholar 

  • Meyer, K. E., Mudambi, R., & Narula, R. (2011). Multinational enterprises and local contexts: The opportunities and challenges of multiple embeddedness. Journal of Management Studies, 48(2), 235–252.

    Article  Google Scholar 

  • Mikkelson, W. H., & Partch, M. M. (1996). The decline of takeovers and disciplinary managerial turnover. Journal of Financial Economics, 44, 205–228.

    Article  Google Scholar 

  • Mitton, T. (2002). A cross-firm analysis of the impact of corporate governance on the East Asian financial crisis. Journal of Financial Economics, 64(2), 215–241.

    Article  Google Scholar 

  • Morck, R., Shleifer, A., & Vishny, R. W. (1989). Alternative Mechanisms for Corporate Control. Journal of Financial Economics, 79(4), 842–852.

    Google Scholar 

  • Moschella, D., Tamagni, F., & Yu, X. (2019). Persistent high-growth firms in China’s manufacturing. Small Business Economics, 52(3), 573–594.

    Article  Google Scholar 

  • Mossman, C. E., Bell, G. G., Swartz, M., & Turtle, H. (1998). An empirical comparison of bankruptcy models. Financial Review, 33, 35–54.

    Article  Google Scholar 

  • Newey, W. K. (1988). Adaptive Estimation of Regression Models Via Moment Restrictions. Journal of Econometrics, 38, 301–339.

    Article  Google Scholar 

  • North, D. C. (1990). A transaction cost theory of politics. Journal of Theoretical Politics, 2(4), 355–367.

    Article  Google Scholar 

  • Ofek, E. (1993). Capital structure and firm response to poor performance. Journal of Financial Economics, 34, 3–30.

    Article  Google Scholar 

  • Opler, T. C., & Titman, S. (1994). Financial Distress and Corporate Performance. Journal of Finance, 49(3), 1015–1040.

    Article  Google Scholar 

  • Panigrahi, A. (2010). Cost Management Strategies in an Economic Crisis: Secret of Survival and Success. Accounting World, X(III), 25–29.

  • Peng, M. W., Sun, W., Vlas, C., Minichilli, A., & Corbetta, G. (2018). An Institution-Based View of Large Family Firms: A Recap and Overview. Entrepreneurship Theory and Practice, 42(2), 187–205.

    Article  Google Scholar 

  • Peng, M. W., Wang, D. Y. L., & Jiang, Y. (2008). An institution-based view of international business strategy: A focus on emerging economies. Journal of International Business Studies, 39, 920–936.

    Article  Google Scholar 

  • Piotroski, J. D., Wong, T. J., & Zhang, T. (2015). Political incentives to suppress negative information: Evidence from Chinese listed firms. Journal of Accounting Research, 53(2), 405–459.

    Article  Google Scholar 

  • Platt, H. D., & Platt, M. B. (2008). Financial Distress Comparison Across Three Global Regions. Journal of Risk and Financial Management, 1(1), 129–162.

    Article  Google Scholar 

  • Rabe-Hesketh, S., Pickles, A., & Skrondal, A. (2001). GLLAMM: A general class of multilevel models and a Stata program. Multilevel Modelling Newsletter, 13, 17–23.

    Google Scholar 

  • Rabe-Hesketh, S., Skrondal, A., & Pickles, A. (2002). Reliable estimation of generalized linear mixed models using adaptive quadrature. The Stata Journal, 2, 1–21.

    Article  Google Scholar 

  • Rabe-Hesketh, S., Skrondal, A., & Pickles, A. (2003). Maximum likelihood estimation of generalized linear models with covariate measurement error. The Stata Journal, 3, 386–411.

    Article  Google Scholar 

  • Rabe-Hesketh, S.; Skronda, A. (2004). GLLAMM Manual. University of California at Berkeley.

  • Rong, Z., Wu, X., & Boeing, P. (2017). The effect of institutional ownership on firm innovation: Evidence from Chinese listed firms. Research Policy, 46(9), 1533–1551.

    Article  Google Scholar 

  • Schumpeter, J. (1934). The Theory of Economic Development. Harvard University Press.

    Google Scholar 

  • Shakina, E., & Barajas, A. (2016). Intangible-intensive profiles of companies: Protection during the economic crisis of 2008–2009. Journal of Intellectual Capital, 17(4), 758–775.

    Article  Google Scholar 

  • Shleifer, A., & Vishny, R. (1997). A survey of corporate governance. Journal of Finance, 52, 737–777.

    Article  Google Scholar 

  • Simon, H. (2010). Beat the Crisis: 33 Quick Solutions for Your Company. Springer.

    Book  Google Scholar 

  • Simsek, Z., Fox, B. C., & Heavey, C. (2015). “What’s past is prologue”: A framework, review, and future directions for organizational research on imprinting. Journal of Management, 41, 288–317.

    Article  Google Scholar 

  • Skinner, D. J. (2008). The rise of deferred tax assets in Japan: The role of deferred tax accounting in Japanese banking crisis. Journal of Accounting and Economics, 46, 218–239.

    Article  Google Scholar 

  • Stef, N. (2021). Institutions and corporate Financial distress in Central and Eastern Europe. European Journal of Law and Economics, 52, 57–87.

    Article  Google Scholar 

  • Sun, Q., & Tong, W. H. S. (2003). China share issue privatization: The extent of its success. Journal of Financial Economics, 70, 183–222.

    Article  Google Scholar 

  • Tihanyi, L., Aguilera, R. V., Heugens, P., Van Essen, M., Sauerwald, S., Duran, P., & Turturea, R. (2019). State ownership and political connections. Journal of Management, 45(6), 2293–2321.

    Article  Google Scholar 

  • Titman, S., & Wessels, R. (1988). The Determinants of Capital Structure Choice. Journal of Finance, 43(1), 1–19.

    Article  Google Scholar 

  • Van der Oord, J., Salditt, T., Bode, P., Reichhuber, A., & Schomann, S. (2009). Smart Cost-Cutting: Sustainable restructuring for small- and medium-sized companies. Kearney Inc.

    Google Scholar 

  • Van Witteloostuijn, A. (1998). Bridging Behavioral and Economic Theories of Decline: Organizational Inertia, Strategic Competition, and Chronic Failure. Management Science, 44(4), 501–519.

    Article  Google Scholar 

  • Wu, G.W. (2018). Capital misallocation in China: Financial frictions or policy distortions. Journal of Development Economics, 130(C), 203–223.

  • Xu, C. (2011). The fundamental institutions of China’s reforms and development. Journal of Economic Literature, 49(4), 1076–1151.

    Article  Google Scholar 

  • Zhang, Z. W., & Wu, S. N. (2005). Economic Distress, Financial Distress and Corporate Performance An Empirical Study Based on A-Share Listed Firms. Journal of Finance and Economics, 31(5), 112–122.

    Google Scholar 

Download references

Acknowledgements

We are grateful for invaluable comments and constructive suggestions from the Editor and three anonymous referees.

Author information

Authors and Affiliations

  1. Business School, Sun Yat-Sen University, Shenzhen, 518107, People’s Republic of China

    Kun Jiang

  2. University of Nottingham, London, UK

    Kun Jiang

  3. Hong Kong University of Science and Technology, Shanghai University, and Fudan University, Shanghai, China

    Susheng Wang

Authors
  1. Kun Jiang
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Susheng Wang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Susheng Wang.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Jiang, K., Wang, S. Survival tactics for distressed firms in emerging markets. Asia Pac J Manag 41, 823–866 (2024). https://doi.org/10.1007/s10490-023-09873-w

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10490-023-09873-w

Keywords

JEL Classification

Search

Navigation