A Competing Risks Analysis of Corporate Survival |
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| Authors: | Qing He Terence Tai-Leung Chong Li Li Jun Zhang |
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| Institution: | 1. Qing He is an Assistant Professor in the School of Finance, Renmin University of China, China Financial Policy Research Center, Renmin University of China, Beijing, 100872, China.;2. Terence Tai-Leung Chong is an Associate Professor in the Department of Economics, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong.;3. Li Li is a Graduate Student in the Department of Economics, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong.;4. Jun Zhang is an Assistant Professor in the Department of Economics, The Chinese University of Hong Kong, Shatin, N.T., Hong Kong. |
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| Abstract: | This paper investigates how the characteristics of a Hong Kong-listed firm influence its odds of going bankrupt, being acquired, and going private. A competing risks model is estimated. Our results reveal that larger firms are more vulnerable to bankruptcy, and that fast-growing firms are more likely to be acquired. We also demonstrate that undervaluation is a key driver of going private. Despite the low agency cost due to the concentrated ownership structure, the propensity of Hong Kong-listed firms to go private still increases with the level of free cash flow. |
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