The Study Of Bond Financing’ Impacts On Corporation Performance Of Listed Companies

Bond financing is not only an important part of capital market, but also a direct financing channel for enterprise. But when compared with other debt instruments (like bank loans, commercial credit loans), and equity financing in China, it is badly limited by economic environment and system, which is called the "short board" phenomenon of China’s capital market. In recent years, with related laws and regulations of China’s capital market come on stage, especially the2007’s securities regulatory commission promulgated "corporate debt issuance pilot way", greatly promote the prosperity and development of the bond market. It specifies the company bond issue to approve the system and market pricing, guarantee no mandatory regulation, funds raised by no longer and fixed asset investment link up with, can be used in technical innovation, improve capital structure and reduce financial cost, etc. This method fully embodies the principle of marketization, and provides the favorable system conditions for enterprise bond financing and management improvement.Enterprise’s financing is divided into two ways:internal financing and external financing. The internal financing source is the free capital and profit retained, and the external financing mainly depends equity financing and bond financing, bank loans and commercial loans. What kind of impact do different financing ways produce to the enterprise operation and management? The foreign and domestic experts and scholars have done quite a bit of research. At present, there are three main conclusions:debt level doesn’t matters with corporate performance; debt levels are positively related to corporate performance; debt level on corporate performance is inversely related to corporate performance. It can be seen that these financing theory pay too much attention to equity financing and debt financing ratio, and less to the difference of debt financing. In some study of debt financing in the literature, there has a preference of bank loan financing, and debt financing is equal to bank loan financing, this is because our country special "argues relationship" cause. Our country enterprises have close relationship with banks. Their contract is fuzzy and not public. At present, a lot of enterprises in the restructuring can’t completely implement bank debt, which makes the bank stop lending and the enterprises have to find other ways.In fact, as one kind of debt financing, bond financing has both debt financing common features and advantages over other debt financing. Bond financing can enhance corporate governance to improve the corporate performance through tax shield effect and financial leverage mechanism. Compared to bond financing, the bonds have lower cost, clearer contract between the creditor and the debtor, more public capital market, more multi-agent supervision. This kind of overall corporate governance mechanism can improve the company’s financial management effect. The performance of listed corporations is directly related to the development of the national economy. Therefore, the study of relationship of bond financing and corporate performance can not only benefit to the correct understanding of bond financing, right arrangement of financing structure so as to improve corporate performance, but also promote the bonds market and national economic development.This thesis regard the relationship between bond financing and corporate performance as the main study object, and deeply discusses the bond financing’ impacts to corporate performance from theoretical and empirical perspectives. In the theoretical analysis, three parts are analyzed. First of all, it defines the bond and bond financing, and reviews the characteristics and present situation of China’s bond financing. Secondly, it defines the corporate performance, and introduced the measurement method and index. Finally, this thesis analyses bonds financing’influence on corporate performance combined with the debt financing theories. In the empirical research, the thesis poses hypotheses, and builds up models of both linear and secondary curve regression to explore the bond financing’ effects to corporate performance.The empirical results show that, the company performance is positively related to bond financing; there does not exist in the best bond financing ratio to make the enterprise obtain the highest market value; all the long-term bonds and short-term bonds have positive influence on corporate performance. In addition, the company performance and total asset turnover have significant positive correlation. Based on the cause analysis of the results, this thesis puts forward the improvements and advices:to raise the bond financing rate and asset turnover ratio; promoting the development of the bond market; weakening the listed company’ equity financing preference and perfecting the bankruptcy and delisting mechanism, so as to improve the performance of the company.