Research On The Impact Mechanism Of Non-penalty Supervision Of The Exchange On The Cost Of Debt Financing

Along with the rapid economic development,China’s multi-tier capital market system is improving day by day.Debt financing has become an important means of raising funds.Financial risks have changed from "capital adequacy risk" to "capital adequacy risk" and "transparency risk".Therefore,it puts forward higher requirements for the construction of information disclosure system.Exchange undertakes "front line oversight" in building the information disclosure system.The inquiry system has become an important mechanism for it to realize the whole social supervision of "before,during and after the event".Since the implementation of the registration system,the quality of corporate information disclosure has been strengthened,the healthy development of the bond financing market has been guaranteed,and the importance of the inquiry supervision mechanism has been further highlighted.As the most representative non-punitive regulatory method,the inquiry letter has become the focus of academic attention.On the one hand,the company being questioned will send a signal to the market that its information disclosure is flawed,which is more like "bad news",which manifests itself as the "information effect" of the inquiry letter.On the other hand,the inquiry letter can promote the internal governance of the company,and reduce the information asymmetry with the outside world through multiple rounds of interactive answers with the exchange,which is manifested as the "governance effect" of the inquiry letter.Therefore,this paper takes the pricing decision of creditors as the starting point,and explores in depth the "information effect" played by the letter of inquiry since the practice of the supervision system of inquiry,so as to improve the pricing of debt financing.Or does the "governance effect" dominate and lower the pricing of debt financing? The cost of financing is not only affected by the enterprise’s own factors,but also by the level of financial development,legal environment,market competition and other external environmental factors.Therefore,under different external environments,does the information of inquiry letter reflect differently in the financing pricing mechanism?To answer these questions,this article examines the economic consequences of non-punitive regulation from the perspective of financial reporting inquiry letters.The results show that the cost of debt financing will increase after the regulatory inquiry,which is the result of the "information effect" of the inquiry letter.The "information effect" of the inquiry letter is different from that of the property right,the level of financial development,the law environment,and the level of competition.The effect of the letter of inquiry on the cost of debt financing will be more significant for private enterprises,regions with a high level of financial development,economic or legal environment,and sectors with high market competition.Through further testing of the transmission path of information effect,it is proved that the letter of inquiry has great influence on the cost of debt financing by lowering the credit rating and increasing the risk of non-compliance.Moreover,the analysis of the breakdown features of the enquiry letter also supports the above opinion,that is,the more frequently asked questions about the same financial report,the need for an audit opinion from a third party,and the extension of the response letter,etc.,the effect on the cost of debt financing is more pronounced.This paper enriches the research on non-punitive regulation and debt financing costs,and proves that inquiry letters can exert regulatory effectiveness,improve the pricing efficiency of debt financing market,and achieve effective allocation of resources.At the same time,it affirmed that the role of inquiry supervision is inseparable from the influence of the external environment,and provides new ideas and directions for optimizing the relevant external environment,improving the inquiry supervision mechanism,and deepening the reform of the regulatory system.This article has enriched the study on the influence mechanism of the inquiry letter and the debt financing cost.The conclusion of this thesis is that the inquiry letter can be used to regulate the market,which will help to increase the pricing efficiency and realize the efficient allocation of resources.This paper also has a reference role for further optimizing the relevant external environment,improving the inquiry supervision mechanism,and deepening the reform of the regulatory system.