The Impact Of High-speed Rail Opening On Corporate Agency Costs

The existence of geographical distance may hinder the exchange of information and face-to-face communication between economic subjects,thus increasing the degree of information asymmetry.In corporate governance,independent directors play a consulting and supervisory role.Among them,nonlocal independent directors weaken supervisory ability due to geographical distance and may cause aggravate corporate agency conflicts.In recent years,China has vigorously developed high-speed rail construction,which has weakened the influence of geographical distance to a certain extent.Therefore,it is necessary to study the impact of high-speed rail opening on corporate agency costs.This paper manually collects the main working place information of the independent directors of China's A-share listing companies and the information of the high-speed rail opening time in 2004-2016.Based on the perspective of Nonlocal independent directors,this paper empirically tests the impact of high-speed rail opening on the agency cost of the company.This paper finds that the opening of high-speed rail can reduce the first-type agency cost and the second-type agency cost of listed companies with nonlocal independent directors;compared with state-owned enterprises,this reduction effect is more obvious in private enterprises,which may be related to the fact that private enterprises provide more incentives for independent directors;compared with the ?big four? audited enterprises,the high-speed rail opening has a more significant effect on reducing the agency costs of non-?big four? audits;and in the case of the opening of high-speed rail in the company's registered place,the "both-side" high-speed rail opening is more helpful to mitigate the first type of agency conflicts and the second type of agent conflicts of listed companies which means the both-side opening of high-speed rail can reduce the company's dual agency costs.In addition,the paper further finds that the geographical distance between the independent directors' work place and the company in which they are employed gets bigger,the nonlocal independent directors more likely be absent from the board meeting,and the high-speed rail opening can reduce the absence of nonlocal independent directors,thus providing a mechanism for the impact of high-speed rail opening on the agency costs of the company.The research conclusions provide empirical evidence for examining the micro-effects of high-speed rail opening on enterprises,and put forward relevant suggestions from the level of investors,enterprises and regulators.