The Potential Risk and Investment Analysis of China’s Automobile Industry in the Context of Financial Crisis

Abstract

In 2008, there came the striking financial crisis in the United States, which has exerted a huge negative impact on the stability of world economy. China’s automobile industry, which serves as pillar of China’s economy, was inevitably affected by the financial crisis. This passage, taking advantage of the stress test, respectively brings in possibility of default as well as Tobin’s Q as stress factors and analyses the potential risk and investment prospect of China’s automobile industry by making use of econometric and economic knowledge.
Key words: Financial Crisis; Stress Test; Tobin’s Q; Value of asset; KMV model