Research On The Impact Of Credit Rating And Reputation Mechanism On Bond Cost

In recent years,China's bond market has developed rapidly,especially corporate bonds have expanded the direct financing channels for enterprises.However,it is followed by a sudden increase in credit risk,bond defaults occur frequently,corporate financing costs increase,financing becomes more difficult,all sorts of problems harm the interests of investors and issuers,and make the bond market unfair.This has a lot to do with bond market Information asymmetry,adverse selection and moral hazard.Therefore,enhancing the quality of information disclosure in the bond market and easing the Information asymetry are of great significance in protecting the interests of investors,reducing the financing cost of issuers and improving the efficiency of the market.This paper studies the impact of credit rating and reputation mechanism on the cost of' bond financing from the perspective of Information asymmetry.In terms of'theoretical analysis,signaling theory and transaction cost theory hold that credit rating and reputation mechanism can play the role of signaling,and rating agencies can collect public and non-public information,credit rating and auditing play an important role in information disclosure by rating issuers and bond instruments from a financial and non financial perspective,and by issuing audit reports for the audit of corporate financial information,Accounting networks and associations.Therefore,highly rated credit ratings,reputable rating agencies and Accounting networks and associations can send a positive signal to the market and play an important role in reducing transaction costs between investors and issuers.In the empirical analysis,based on the current situation of the development of China's bond market and the availability of data,this paper selects the publicly issued corporate bonds of Shanghai and Shenzhen stock markets from 2012 to 2019 as a research sample,drawing on the research methods of scholars at home and abroad,taking the credit spread of corporate bonds as the agent variable of bond financing cost.assigning ratings to rating agencies according to their market share and comprehensive evaluation ranking as the agent variable of rating agencies reputation,this paper makes a regression analysis of bond financing cost based on credit rating and reputation mechanism by using "top ten"Accounting networks and associations as Accounting networks and associations reputation agent variable,at the same time,descriptive statistics,correlation analysis,Vif test,robustness test and other methods of empirical research,and draw the following conclusions.(1)High credit rating can significantly reduce the cost of corporate bond financing,regardless of debt rating and subject rating.But for corporate bonds,subject ratings are a little stronger.(2)The choice of high-reputation credit rating agencies and Accounting networks and associations can significantly reduce the cost of corporate debt financing,and in China compared with rating agencies,accounting networks and associations's reputation is more likely to have a significant impact on the cost of corporate debt financing.(3)The nature of the enterprise will have a moderating effect on the relationship between credit rating,reputation mechanism and bond financing cost,compared with non-state-owned enterprises,the bond financing cost of the state-owned enterprises is less sensitive to the credit rating and the reputation of the rating agencies and auditors employed,and the high credit rating and reputation have a weaker effect on the reduction of the bond financing cost.This paper tries to put forward some reasonable suggestions for the development of China's bond market from the perspective of Information asymmetry.In particular,by studying the impact of the surge in demand in the credit rating industry and the auditing business in recent years on the cost of debt financing,the hope is that the rating agencies and the Accounting networks and associations will provide high quality disclosure,it can transmit the accurate signal about the company to the market.ease the pressure of the company's financing,reduce the cost of the bond financing,and provide more scientific theoretical basis for the investors'bond investment and the perfection of the bond market supervision system.