Research On The Relationship Between Institutional Investors,Internal Control And Debt Capital Cost

Since the implementation of the supply-side structural reforms,the vitality,creativity,and competitiveness of China's economy have been significantly enhanced,but some industries still have serious overcapacity.Therefore,it is still an important task of current economic development to further advance the supply-side structural reform and continue to optimize the economic structure.As economic development enters the new normal,domestic listed companies can only adapt to the trend of economic development in the new era only by continuously improving their overall development level and actively and rationally carrying out transformation and upgrading.From the practical results of the "three go,one drop,one supplement" task in the past four years,we can see that cost reduction is the task with the highest amount of gold,the least objection,and the most significant effect Therefore,if enterprises want to improve their own strength,they should increase their efforts in reducing their capital costs.How can you reduce the cost of capital for your business?The various corporate governance mechanisms of the company have high expectations.As an important mechanism of corporate governance,institutional investors and internal control.Enterprises choose to raise funds from institutional investors and strengthen and improve the internal control system is very important for the company to reduce the cost of capital.Therefore,the article will mainly study the internal level of institutional investors and their heterogeneity,internal control and the cost of debt capital.In addition,due to China's special economic development model,there are huge differences in marketization levels among regions.The level of marketization process has made the relationship between institutional investors,internal control quality,and debt capital cost more complicated.Therefore,the article will further study the impact of the marketization process on the relationship between institutional investors,internal control quality and debt capital cost.This article uses the relevant financial data of 668 listed companies in China for 7 consecutive years from 2011 to 2017 as a research sample.First,it empirically examines the cost of institutional investors and debt capital from the perspective of institutional investors' overall shareholding and heterogeneous institutional investors The relationship between internal control and the cost of debt capital is examined from the perspective of the five elements of internal control and the quality of internal control.At the same time,the quality of internal control is tested on the overall shareholding level of institutional investors,heterogeneous institutional investors and debt capital.The intermediary effect of the cost relationship;finally,this paper further analyzes the impact of institutional investors' overall level and heterogeneity on debt capital cost under different marketization processes,and the impact of internal control quality on debt capital cost.The research results in this paper show that:(1)The overall holding level of institutional investors is positively related to the cost of debt capital.The holding of pressure-resistant institutional investors has a significant negative effect on the cost of debt capital.There is a significant positive effect on costs;(2)The quality of internal control does not have a significant impact on the cost of debt capital,but risk assessment and information and communication have a significant positive impact on the cost of debt capital;(3)The quality of internal control The relationship between the overall level of institutional investors and the cost of debt capital has a significant mediation effect;among heterogeneous institutional investors,the quality of internal control has a significant mediation effect on the relationship between pressure-resistant institutional investors and the cost of debt capital,and the quality of internal control There is no intermediary effect on the relationship between pressure-sensitive institutional investors and the cost of debt capital;(4)In different marketization processes,in terms of institutional investors:the positive correlation between the overall shareholding level of institutional investors and the cost of debt capital is Regions with low marketization processes are even more significant;among heterogeneous institutional investors,The positive effect of pressure resistance institutional investor holdings on the cost of debt capital In regions where the marketization process is high,the positive effect of pressure sensitive institutional investor holdings on the cost of debt capital is not affected by the marketization process.In terms of the quality of internal control:Compared with regions with high marketization processes,the significant negative correlation between the quality of internal control and the cost of debt capital is more obvious in regions with low marketization levels.Based on the above research conclusions,this paper proposes corresponding policy recommendations from the aspects of optimizing the structure of institutional investors and improving the internal control system,and points out the shortcomings of this research,with a view to rationally controlling the cost of debt capital for listed companies in China and improving the use of corporate funds Rate to promote the better development of the company to provide some reference.Figure[Three]Table[Thirteen]Reference[One hundred and nineteen]...