Research On Executives' Academic Experience And Debt Financing Cost Of Listed Companies

The Nineteenth National Congress of the Communist Party of China made an important judgment that China's economy has changed from a stage of high-speed growth to a stage of high-quality development.This is a distinct feature of China's economic development in the new era.It puts forward unprecedented higher requirements for the quality,efficiency and power changes of economic development.Recently,the whole capital market has shown a slowdown in profits,weak internal cash flow,and contraction of external cash flow.The overall solvency has declined significantly.The overall market solvency declines,which further reflects that the debt financing of listed companies will receive more and more restrictions.Executives,as managers of enterprises,affect the operation and development of enterprises.As a special group of our country,"Xiahai School" plays a huge influence in our capital market.After rigorous academic training,they are more conservative and prudent,more logical,and more dependent on data and scientific materials for support in uncertain decision-making.At the same time,they have higher ideological and moral level and pay more attention to their own reputation and good image.These characteristics will affect their business management mode,strategic choice and future development direction of enterprises,affect the degree of information asymmetry and operational risk of enterprises,and then affect the cost of debt financing.This paper first describes the background of the special phenomenon of "Literati Xiahai School " since China's reform and opening up,and finds that this phenomenon has a tremendous impact on the debt financing of listed companies.This study enriches the research on the factors affecting the debt financing cost of listed companies,and provides more considerations for listed companies in deciding the choice of management,which is of great significance to the improvement of the management system of listed companies.At the same time,according to the current research situation,this paper finds that both here and abroad can be studied at the macro level(the nature of enterprises,market conditions)and micro level(company level,intermediary effect).On the basis of a full understanding of the research direction of this paper,combined with previous studies to define the variables of this paper,the academic experience of senior managers is defined as having served as university teachers,research institutes or researchers or had worked in associations to do research work.At the same time,we analyze the current situation of debt financing and the proportion of senior managers withacademic experience in China's capital market,and find that the proportion of senior managers with academic experience in listed companies is more than 1/3.In order to verify the hypothesis of this paper,based on the high-level echelon theory,behavioral finance theory and capital structure trade-off theory,a mixed regression and fixed effect model is used to conduct empirical research on the data of Shanghai and Shenzhen A-share listed companies from 2010 to 2017.The results show that:(1)There is a significant negative correlation between the academic experience of senior managers and the cost of corporate debt financing.Specifically,executive academic experience can reduce the cost of corporate debt financing by about 3%.This conclusion is still valid after using two-stage regression method,propensity score matching method and controlling firm fixed effect to control endogenous problems,and robustness test conclusion is also valid.(2)For enterprises with debt financing constraints and financing difficulties,the effect mechanism of senior managers' academic experience on debt financing cost of listed companies is more significant,which is embodied in the influence of non-state-owned enterprises on corporate debt financing cost compared with senior managers' academic experience of state-owned enterprises,and that of enterprises with low level of marketization on senior managers' academic experience of enterprises with high level of marketization.The impact of debt financing cost is more significant.(3)By further studying the mechanism of the influence of executive academic experience on the cost of corporate debt financing,this paper finds that executive academic experience can influence the cost of debt financing by influencing the business risk and the degree of information asymmetry.At the same time,the academic experience of executives of listed companies can greatly reduce the experience risk and information asymmetry of enterprises,while the lower degree of operational risk and information asymmetry can further reduce the financing cost of enterprises,there is a significant intermediary effect.This paper verifies the negative relationship between the academic experience of senior managers and the cost of debt financing of listed companies through empirical tests.The conclusions can provide reference for the composition of senior managers' structure,the career choice of senior managers and investors' decision-making.