Impact Of Executives’ Political Background On Debt Financing Costs Of Listed Enterprises

Debt financing is one of the main means for companies to obtain external financing.The cost of debt financing will bring potential changes to their profit margins and growth.In the context of China’s unique system,the government still holds most of the country’s economic resources.Enterprises often use the political background of executives to close the relationship with the government,thus reducing financing constraints,so it is necessary to explore the political background of executives.The impact on corporate debt financing costs.When the creditor decides the financing cost of the financing party,it will systematically assess the risk.Commercial credit is also one of the factors referenced by the creditor.Therefore,it is necessary to understand the relationship between commercial credit and debt financing cost.This is of great significance to the appointment of senior executives,the improvement of government governance,the reduction of information asymmetry and the promotion of fair competition among enterprises.This paper mainly explores the impact of corporate financial financing from the perspective of the political background of executives,and further studies whether the relationship between commercial credit and debt costs changes under the political background of executives.The research framework of this paper is divided into five parts: The first part is the introduction,which mainly introduces the political background of the executives and the research background of the debt financing cost,the research significance,the research methods used in this paper and the definition of the three core concepts in the full text.The second part is aliterature review at home and abroad,which is mainly summarized and summarized from the political background of senior management,corporate debt financing cost and commercial credit.The third part is the theoretical analysis and hypothesis.Based on the information asymmetry,rent-seeking,signal transmission,and relationship economy,the research hypothesis of this paper is put forward.The fourth part is research design and empirical analysis.The annual data of 3439 listed companies in Shanghai and Shenzhen A shares are selected from 2008 to 2016.The fixed effect model is used to study the influence of executive political background on corporate debt financing costs and the political background of executives.The impact of the relationship between commercial credit and corporate debt financing costs,and the robustness test and heterogeneity test based on the basic model.The fifth part is the research conclusions and prospects.According to the research results of empirical analysis,the corresponding policy recommendations are put forward,pointing out the research shortage and possible future research directions.Through empirical analysis,the paper draws the following conclusions:(1)The political background of executives significantly reduces the debt financing costs of enterprises,that is,the political background of executives will bring certain cost advantages to enterprises.(2)The political background of executives In the small-scale enterprises,the cost of debt financing is more significant than that of large-scale enterprises.(3)The political background of executives has a significant reduction in debt financing costs among non-state-owned enterprises than in state-owned enterprises.(4)The better the commercial credit of a listed company,the lower the cost paid by the enterprise in debt financing.(5)The political background of executives can enhance the negative relationship between commercial credit and debt financing costs,but this effect is not significant.But in state-owned enterprises,the political background of executives has weakened the degree to which commercial credits reduce debt costs.In non-state-owned enterprises,the political background of executives significantly enhances the negative relationship between commercial credit and debt financing costs.The innovations of this paper are as follows: Firstly,the current domestic and international research on the political background of executives mainly focuses on the impact on corporate governance and corporate value,and there are relatively few studies on the impact of debt financing costs.In addition,the existing research on the relationship between executive political background and debt financing cost mainly relies on accounting information such as information disclosure quality,accounting conservatism and audit opinions to act as an intermediary variable to explore the financial background of executives.Mechanism.This paper selects a new perspective of commercial credit to explain the relationship between executive political background and debt financing costs,enriches the theoretical support for the economic consequences of seeking political connections,and make a contribution to the fields of debt financing costs.