Abstract：
Based on 378 Chinese corporations in financial distress from 2000 to 2010, this paper uses panel data analysis method to analyze the relationship between propping behaviors of controlling shareholders and the subsequent evolution path of distressed company. The results show that: (1) Firms changing well get more propping from controlling shareholders far more than firms changing badly. (2) Controlling shareholders in good condition give more propping to firms. The state-owned controlling shareholders provide propping to firms because of the "soft budget constraint" and "social cost" constraints, which is good for firms to get rid of financial distress.
2015 
