Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)

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Financial Crisis Analysis of Evergrande Group from the Perspective of Game Theory

Authors
Zexuan Wang1, †, Kesu Ye2, *, †, Dianying Zhu3, †
1Capital University of Economics and Business, 100070, Beijing, China
2School of Economics and Management, Northeast Normal University, 130117, Changchun, Jilin, China
3School of Civil Engineering, Tongji University, 200092, Shanghai, China
†

These authors contributed equally.

*Corresponding author. Email: Daniel.Zhu@tongji.edu.cn
Corresponding Author
Kesu Ye
Available Online 1 July 2022.
DOI
10.2991/aebmr.k.220603.045How to use a DOI?
Keywords
Financial leverage; Game theory; Government; Evergrande Group
Abstract

With the gradual implementation of the national deleveraging policy and changes in the internal business environment of enterprises, debt default events occur frequently, and many enterprises are facing a serious financial crisis. This paper takes Evergrande, a leading real estate enterprise, as the research object. We analyze the causes and effects of its financial crisis by studying its financial indicators and establish a game theory model to analyze the game between the government and enterprises, as well as the optimal solution for Evergrande to get out of the financial crisis. Studies show that the reasons for Evergrande’s debt default are blind expansion, high leverage ratio, insufficient cash flow management, and stricter national policies. To get out of the financial dilemma, Evergrande needs to rely on its own rescue and the synergies of investors, management, and government. At the same time, in order to avoid falling into financial difficulties, other enterprises need to be cautious about diversification, rationally control leverage ratio, and balance development speed. The government should adopt the policy of seeking progress while maintaining stability, continue to promote financial reform, and reduce financing costs of enterprises.

Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license.

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Volume Title
Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
1 July 2022
ISBN
978-94-6239-585-5
ISSN
2352-5428
DOI
10.2991/aebmr.k.220603.045How to use a DOI?
Copyright
© 2022 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article distributed under the CC BY-NC 4.0 license.

Cite this article

risenwbib
TY  - CONF
AU  - Zexuan Wang
AU  - Kesu Ye
AU  - Dianying Zhu
PY  - 2022
DA  - 2022/07/01
TI  - Financial Crisis Analysis of Evergrande Group from the Perspective of Game Theory
BT  - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
PB  - Atlantis Press
SP  - 262
EP  - 274
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220603.045
DO  - 10.2991/aebmr.k.220603.045
ID  - Wang2022
ER  -