The Reduction of Credit Risk in the Health Care Industry in China: Are We Returning to the Pre-COVID-19 Era?
Front Public Health
; 9: 835500, 2021.
Article
in English
| MEDLINE | ID: covidwho-1674416
ABSTRACT
This study aims to evaluate the changes in the credit risk of the health care industry in China due to the COVID-19 epidemic by the modified KMV (named by Kealhofer, Mcquown, and Vasicek) model to calculate the default distances. We observe that the overall default distance mainly first decreased and then increased before and after the COVID-19 epidemic control in China; after the epidemic was controlled, the overall credit risk was reduced by 22.8%. Specifically, as shown in subdivided industries, health care equipment and health care facilities have larger credit risk fluctuations, while health care suppliers, health care distributors, and health care services have smaller fluctuations. These results can contribute to our understanding of why the COVID-19 epidemic in China could be controlled earlier, and software facilities are more important than hardware facilities in public health safety. Our methodological innovation is to use the GARCH (generalized autoregressive conditional heteroskedasticity) model and threshold regression model to modify the important parameters of the KMV model. This method has good accuracy in the Chinese environment.
Keywords
Full text:
Available
Collection:
International databases
Database:
MEDLINE
Main subject:
COVID-19
Type of study:
Experimental Studies
/
Observational study
/
Prognostic study
Limits:
Humans
Country/Region as subject:
Asia
Language:
English
Journal:
Front Public Health
Year:
2021
Document Type:
Article
Affiliation country:
Fpubh.2021.835500
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