Research On Effect Of Debt Governance Of Listed Companies

Capital structure and corporate governance are closely related, and debt financing, as one of the most important ways of financing, make a significant impact on corporate governance. Therefore, research on debt financing, can play an important role in improving corporate governance. In recent years, with the development of China's market economy, the domestic scholars have become increasingly in-depth on corporate governance research, but today they focus on equity governance, while research on governance effect of debt financing is relatively less. This paper will make related research on governance effect of debt financing for listed companies in China based on the perspective of agency costs.This paper firstly describes the research background of listed companies and research significance, and reviews the domestic and foreign literatures on governance effects of debt financing, then makes theoretical analysis and empirical analysis on governance effects of debt financing, finally the writer makes a few suggestions. In the literature review process, the writer thinks the Western's theory and empirical research on governance effects of debt financing are relatively mature, while the domestic researches are still in preliminary stage, and most of the domestic researches conclude that the debt financing has denied the effect of corporate governance. Secondly, on the basis of the relevant theoretical analysis, this paper mainly drawing on the agency cost theory, incentive theory, signal transmission theory and control theory and so on, analyzes how the debt financing influence business agency costs through the incentive effects of debt, signaling effect etc, and this paper, from the debt general level, debt maturity structure and debt type structure, respectively studies their governance efficiency of debt financing.Again, the writer takes the 2003-2009's data from the Shanghai and Shenzhen stock company for sample and makes empirical analyses. In this paper, equity agency costs will be divided by the first kind of agency costs caused by conflicts between shareholders and management of and the second kind of agents caused by conflicts between controlling shareholder and minority shareholders. At the same time through the general level of debt, debt maturity structure and debt type structure and so on, the writer respectively studies their governance efficiency of debt financing. On these basis, the paper gets the following conclusions:.(1) From the general level of debt, debt financing has a certain inhibitory effect on the two types of agency costs, indicating that the debt financing not only have a certain constraint on the role of management, but also to some extent inhibited controlling shareholders to occupy interests of minority shareholders.(2) Considering from the debt maturity structure, Short-term debt has a certain inhibitory effect on the two types of agency costs, but the long-term debt has not played its governance effect.(3) From debt type structure analysis, only the commercial credit financing, to some extent, can inhibit the two types of agency costs, and bank loans only can inhibit the first kind of agency cost. As for the second kind of agency cost, bank loans not only have no in impact on inhibiting it, but also intensified the controlling shareholders'expropriation; In addition, corporate bonds and bank loans play the same role, only for the first kind of agency cost on the inhibition; Finally, through further analysis of effects of different sample groups of bank governance effect and found that non-state governance of listed companies is higher than the effect of state-owned listed companies.Finally, according to the specific circumstances of the listed companies in China, this paper proposes the following advices:reasonable arrangements for debt maturity structure, strengthening the legal protection of small and medium shareholders, perfecting the bank monitoring mechanism; the acceleration of China's the development of the bond market, etc.