The Evergrande Scandal: Corporate Mismanagement, Financial Overreach, and Their Global Consequences
Year: 2025
Type: article
Abstract: The Evergrande scandal is a striking example of corporate mismanagement and financial overextension, reflecting deep-rooted systemic weaknesses in corporate governance and regulatory oversight in China's real estate development industry. This paper explores the factors that underpin Evergrande's rapid growth, with a particular focus on its aggressive borrowing strategy and inability to maintain financial discipline. We examine how this unsustainable growth model, fueled by excessive debt, led to a liquidity crisis that threatens not only China's real estate market but also global financial stability. Through a comprehensive analysis of financial indicators, corporate governance practices, and the regulatory environment, this study provides insights into the broader economic impact of Evergrande's collapse. Finally, the study highlights the urgent need for a stronger regulatory framework to prevent similar crises and safeguard financial stability at home and abroad.
Authors: Ziyi Zheng, Aoyu Chen
Institution: University of Connecticut
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4410619684