Internal Control Quality、Market-oriented Process And Corporate Debt Financing Costs

Capital is the basis of the production and operation of the enterprise.The financing ability of the enterprise can affect the cash holding level of the enterprise,Thereby further affecting the competitiveness of the enterprise.With the development of capital market,debt financing has become the main means for Chinese enterprises to obtain operating funds,and debt cost has become an important indicator of the company’s operational development ability.However,the financial fraud in the capital market continued to be staged,causing huge losses to investors and seriously damaging the confidence of creditors in the capital market.In order to protect their own interests,investors will require enterprises to provide higher risk premiums,which will distort transaction prices and seriously affect the efficiency of the capital market.The construction of the internal control system can improve the quality of corporate accounting information disclosure and deliver more protection signals to investors.Then,whether internal control can play the role of signal transmission,affect the creditor’s decision,and make them make reasonable pricing has become the main problem of this paper.Based on the sample of A-share non-financial listed companies in Shanghai Stock Exchange from 2013 to 2017,this paper comprehensively analyses the impact of internal and external governance environment on the cost of debt financing.The results show that the quality of internal control can significantly reduce the cost of debt financing.Furthermore,the impact of the marketization process on the relationship between internal control quality and debt financing cost is examined by grouping sample data to test the adjustment role of the marketization process.It is found that the quality of internal control can significantly reduce the cost of corporate debt financing only in areas with slower market-oriented process,but not in areas with faster market-oriented process.In view of the above conclusions,the paper proposes that enterprises should raise the awareness of internal control construction of management and improve the construction of internal control;relevant regulatory departments should improve the construction of internal control and disclosure rules,urge and guide enterprises to carry out internal control construction.The research of this paper can enrich the theoretical research related to internal control and debt financing cost,and provide theoretical support for enterprises to carry out internal control construction and make optimal economic decisions based on internal and external governance environment.