The Research On The Influence Of Internal Control Quality On Corporate Debt Financing

In our country,debt financing is an important way of external financing of enterprise.Through debt financing,enterprises can lower the cost of raising money.It is of great significance to improve the profitability and competitiveness for companies,too.However,the rising of debt financing costs and financing difficulties have become two main obstacles to the development of the enterprise due to the asymmetric information and principal-agent problems.Scientific and comprehensive internal control system can supervise the behavior of the managers and improve the quality of accounting information to reduce the information risk of creditors and investors.And then reduce the cost of debt capital and relieve the funding pressures for enterprises.Furthermore,it can be found that the influence of internal control quality on debt financing is different in different property rights and financial market development levels.Because of the special system of our country's environment,there are significant differences in aspects in external regulation environment and internal governance structure between the state-owned enterprises and non-state-owned enterprises.Thereby their internal control can also have varied expression on financing constraints.Non-state-owned enterprises(including private enterprises,foreign-funded enterprises,etc.)get less administrative intervention from the government than state-owned enterprises relatively,so they will regard maximizing the profits or shareholders' value as the management goal and will be more motivated to reinforce the construction of internal control to reduce the enterprise's financing costs.In addition,the financial market development level also affects a series of factors which is closely related to enterprise's investment and financing decisions such as the development degree of capital market,the degree of government intervention,the degree of information asymmetry,and the efficiency of resource allocation,etc.Taking the a-share listed companies in Shanghai and Shenzhen from 2012 to 2016 as research object,this paper selected appropriate variables and established three multivariate regression modes.Then the author carried out the descriptive analysis,correlation analysis,and regression analysis and robustness test.The results show that the internal control quality help enterprise debt financing constraints.As its specific performance,high quality internal control can help enterprises to obtain longer debt maturities and get more new borrowing at a lower rate of interest.Then,the author divided the whole samples into two groups respectively from the nature of property rights and financial market development level and get the following conclusion:in non-state-owned listed companies and the listed companies in the regions that have higher level of financial market development,the improvement of internal control quality can alleviate enterprise debt financing constraints more.Finally,on the basis of the research conclusions,this paper puts forward some suggestions from several aspects,for example,perfecting relevant laws and regulations,strengthening the supervision of internal control information disclosure,building scientific internal control system,etc.