Topic: Implicit government guarantees and shareholder-creditor conflicts: Evidence from corporate dividend policy
Date & Time: 13:30-15:00 May 7, 2026
Venue: Room 245, Quanxue Building
Organizers: School of Accounting, Dongbei University of Finance and Economics; Liaoning Province Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center
Abstract：
Implicit government guarantees (IGGs) undermine market-based discipline and reshape shareholder-creditor relationships. Exploiting China's first bond default in 2014, namely the Chaori bond default, as a no-bailout shock that diminishes IGGs, we investigate the impact of IGGs on shareholder-creditor conflicts. Using corporate dividend payments to depict the conflicts of shareholder-creditor relations, we find firms with high credit risk significantly reduce their cash dividends relative to those with low credit risk following the Chaori default shock. Mechanism tests show that high-credit-risk firms experience diminished access to external debt markets while bonds newly issued by such firms are required to obtain higher bond ratings, have additional protective covenants for bondholders, and offer higher premiums following the Chaori default shock. The impact of diminished IGGs strengthens among high-credit-risk firms with fewer cash inflows from bank loans or no newly issued bonds, and among those with outstanding bonds that have protective covenants or lack explicit guarantees. Heterogeneity tests show that the negative impact is more pronounced among high-credit-risk firms with lower economic importance or poorer solvency. Our study highlights the role of IGGs in affecting the shareholder-creditor conflicts through credit risk shifting.
Introduction of Speaker:
Yang HE holds a PhD in Finance from the School of Management at Fudan University and was jointly trained at Michigan State University, USA. His main research interests include supply chain and corporate finance. His research has been published in journals such as the Journal of Corporate Finance.
