Research On The Influence Of Organizational Redundancy On Equity Financing Cost

Currently,the process of globalization is accelerating,political,economic,and scientific and technological changes are accelerating,and the uncertainty and complexity of enterprise survival have risen to unprecedented levels.The sudden COVID-19 epidemic has seriously hindered the development of the international economy,magnified the difficulties faced by enterprises in their operations,and worsened the external environment for the survival and development of enterprises.As a resource buffer within an enterprise,organizational redundancy can quickly be converted into available resources in critical situations,buffering fluctuations and shocks from the outside world,and enabling the enterprise to smoothly navigate the crisis.In the post epidemic era,investors pay more attention to the safety of their investments and the stability of the operations of the invested enterprises,they gradually realizing that the existence of organizational redundancy is of great significance to the survival and development of enterprises.Equity financing cost is the necessary rate of return required by shareholders after evaluating returns and risks,and plays a crucial role in the value evaluation,asset pricing,and performance appraisal of enterprises.Organizational redundancy can effectively improve the risk bearing capacity of enterprises,and help reduce the premium compensation for risk for investors.Therefore,this thesis believes that organizational redundancy is likely to have an impact on the expected rate of return for investors.Based on the above analysis,this thesis in-depth studies the impact of organizational redundancy on equity financing cost and its impact mechanism.This thesis selects the data of A-share listed companies in China from 2017 to 2021 as a sample,and studies the impact of organizational redundancy on equity financing costs based on organizational theory and resource based theory,etc.It also introduces enterprise innovation and internal control into the research framework,further studying the impact path of organizational redundancy on equity financing costs and the mediating regulatory effect of internal control.The empirical research results are as follows:(1)The existence of organizational redundancy can effectively reduce investors’ premium compensation for future risks and reduce equity financing cost;(2)Organizational redundancy can promote enterprise innovation through resource support and manager confidence support,and enterprise innovation plays a partial intermediary effect in the mechanism of organizational redundancy’s impact on equity financing cost;(3)Internal control strengthens the impact of organizational redundancy on the reduction of equity financing cost,and this positive moderating effect works partly through the mediating variable enterprise innovation.This thesis explores the positive impact of organizational redundancy within an enterprise,enriches research on the economic consequences of organizational redundancy,and expands research on the influencing factors of equity financing cost.It provides valuable reference for enterprises to effectively utilize redundant resources,reduce equity financing cost,strengthen internal control quality,and improve resource utilization efficiency.