The Influence Of Power Disposition On Debt In The Perspective Of Using Debt Tax Shields

The listed private enterprises can be divided into direct listing and indirectlisting according to the way of listing. As the two types have different ways of listing,there are many differences in purpose of listing, motivation and concept of corporategovernance after listing. Corporate management situation is the quality of internalcorporate governance those are caused by different ways of listing. Positive corporategovernance situation will prompt shareholders and managers make rational corporategovernance behavior. But under the abnormal situation, shareholders and enterprisemanagers only care about their own interests don’t care about whether the enterprisevalues will promotion or not. Identifying the effect of corporate governance situationon the relationship between power disposition and debt, enterprises should adjustownership structure and power of management according to the development ofstrategic and specific motives to make enterprises to do rational behavior, and driveenterprises to better development.The paper aims to study the effect of corporate governance situation on therelationship between power disposition and debt. The different corporate governancesituation will cause different corporate governance behavior, and then they affect therelationship better power disposition and debt. In the empirical, we take debt taxshields as quantitative indicator of corporate governance behavior, and study thatwhat kinds of power disposition encourage enterprises to make rational behavior. Ifenterprises’ effective tax rate increases, enterprises will increase the level of debt,because debt tax shield value is added after the reform. If enterprises’ effective taxrate decreases, enterprises will decreases the level of debt, because debt tax shield value is declined after the reform.The paper analysis the data from the way of descriptive analysis, correlationanalysis and regression analysis, finally it concludes the main conclusion as follows,①、The results of the relationship between listed private enterprises’ownershipstructure and debt in the perspective of using debt tax shields show that, during thestage of rate increased, indirect listing private enterprises make less use of debt taxshields than direct, ownership structure of former are negatively related to debt,while the latter is positive correlation between ownership structure and debt.②、The results of the relationship between listed private enterprises’ power ofmanagement and debt in the perspective of using debt tax shields show that, duringthe stage of rate increased, if the actual control people of direct listing and indirectlisting enterprises served as chairman of the board or managing director, two typeswill use debt tax shield, family control plays a role of promoting debt.When theactual control people don’t serve as chairman of the board nor managing director, thetwo types won’t use debt tax shield, professional control prevents the debt.