| Currently the phenomenon of the finance executive tie in the listed company in China remains widely spread, it is an average of more than 10% in the listed company sample of 2003-2013. As a general hierarchy, the finance executive tie is a special class of chain board. The particularity shows financial institutions are one side of the tie relationship.On the one hand, financial institutions are the important source of enterprise external capital. And the tie relationship between enterprises and financial institutions-the finance executive tie constitutes the tie passage in between and strengthens the connection in between. The close relationship between enterprises and financial institutions help enterprises to achieve the credit financing. So the finance executive tie could help to achieve the capital of enterprise credit. Viewed in the perspective, the finance executive tie embodies the close relationship between enterprises and financial institutions may have credit financing function.On the other hand, the financial theory of western tradition always regards financial institutions as participants of corporate governance and its effect of debt governance could decrease effectively the agency cost of economic man. As the representative that financial institutions sent to broad, the finance executive tie help financial institutions to understand the enterprise information in more detail and implement the supervisory responsibility clearly. All the above help the finance executive tie to play a part in supervising effectively and decrease effectively the agency cost of economic man. Viewed in the perspective, the finance executive tie embodies the effective way of financial institution debt governance may have debt governance function.Therefore, the effect of credit financing in achieving credit capital and the effect of debt governance in decreasing agency cost of economic man exist in the finance executive tie at the same time.In practice, on the one hand, due to China’s capital market still unimproved, the problem of external financing constraints is widespread. Financial institutions have been the main resource of corporate external financing, because the development of relevant financial intermediaries is quite slow, the credibility of relevant information that it provides is low too, so it can’t play an effective role between financial institutions and enterprises to reduce information asymmetry. Financial institutions often are based on enterprise’s information as credit financing documents, so the information asymmetry is bad for gaining the credit funds of financial institutions, and exacerbating the external financing constraints of enterprises. The severe external financing constraints will affect the investment efficiency of enterprises and harm the enterprise performance.On the other hand, there are still severely agency problem in China’s enterprises, managers often seek to maximize their own interests, rather than to maximize shareholder’value, which leds to higher agency cost. The outstanding performance of agency cost is more serious of excessive public consumption and blind investment expansion. By excessive spending public funds, managers can directly achieve their own private benefits. By expanding the scale of enterprise, managers are able to enjoy higher pay as well as higher social status. But seriously excessive public funds consumption bring the enterprise fund loss directly, reducing the available business funds, reducing the fund using efficiency. The blind expansion of investment directly distort the investment behavior of enterprises, reducing the efficiency of investment. Thus, the agency problem of excessive public fund consumption and blind investment expansion will damage enterprise performance, undermine enterprise value.Those background causes our attention on the more common phenomenon of finance executive tie. In the background of our business practices, the study has a strong practical significance to find whether the finance executive tie plays the credit financing role to ease external financing constraints and the debt governance role to reduce agency cost.The role of credit financing and debt governance that finance executive tie played is closely connected. The logical relationship between them is reflected in the capital allocation efficiency that using and obtaining credit funds. Their mutual influence will be reflected in the enterprise performance. The study of finance executive tie’s credit financing and debt governancing role helps better understanding of the phenomenon of finance executive tie, and give full play to the role of credit financing and debt governancing efficiently. And our special institutional background may also affect the role of credit financing and debt governancing that finance executive tie plays, as well as the interaction effect of them, which also provides a wealth of research material for finance executive tie.In practice, on the one hand the capitals markets in China still need to perfect further, which make the enterprises exist the external problems of financial constrains in different degree and financial institutions become the main source of enterprise in external financing. On the other hand, the serious problems of economic man agency exist in enterprise in China. The outstanding performance contains excessive public consume and blind expansion of investment. The above agency problems could damage the empirical performance of enterprises.The above practical backgrounds of enterprises raise our concern on the finance executive tie. At the same time, the special system backgrounds in China affect the effect of credit financing and debt governance, which offer material for us to research the finance executive tie.The research ideas and frame follow the way from norm to empirical research. In the first chapter, the introductions introduce the research topics and ways. The second chapter introduces the related references in China from the chain broad related with the areas of the finance executive tie, the relationship between enterprises and financial institutions debt governance. Whether the finance executive tie effect of credit financing or debt governance cannot do without itself influence. So the third chapter introduces the process of the system in financial institution reform in China, which help to know financial institution itself characteristic. The empirical research begins in the fourth chapter and this paper regards the Shanghai and Shenzhen A shares of listed corporations from 2003 to 2013 as research data, and cleans up the information of the finance executive tie, combined with property rights as well as the level of financial development institutional context, investigates the effect of credit financing and debt governance.In the fourth chapter, we investigate the effect of credit financing in the finance executive tie. The results show that the finance executive tie has an effect on capital credit financing, compared with non-finance executive tie, enterprises with finance executive tie get more loan funding, including funding of long-term loans and short-term loans. The property of enterprise rights could affect the effect of credit financing. Compared with state-owned enterprises, the effect of credit financing in the finance executive tie becomes stronger in private enterprise. There are substitutable relationship between the developing level of finance and the effect of credit financing. When the developing level of finance is poor, the effect on achieving credit capital by enterprises will be strong.In the fifth chapter, the effect of debt governance in the finance executive tie is investigated. The research results show that the finance executive tie restrain the effect of debt governance in economic man agency cost, compared with non-finance executive tie, senior manager in enterprises with finance executive tie have lower public consumption, lower blind investment expansion, but no improved managers’turnover. The property of enterprise rights could affect the effect of debt governance. Compared with state-owned enterprises, the effect of debt governance in the finance executive tie becomes stronger in private enterprise. There are complementary relationship between the developing level of finance and the effect of debt governance. When the developing level of finance is well, the effect on achieving credit capital by enterprises will be strong.In the sixth chapter, the effect of performance enterprises is brought by the finance executive tie and the mutual relationship between the effect of credit financing and that of debt governance in the finance executive tie are investigated. The results show that the mutual effect between the effect of credit financing and that of debt governance could make the finance executive tie increase performance enterprises, compared with non-finance executive tie, enterprises with finance executive tie have better performance in the ROA, ROE and EBIT. However, due to the mutual influencing of credit financing and debt governance, business performance that finance executive tie may enhance shows differences changes. The reason is that, in different system backgrounds, the strong and weak match between the effect of credit financing and that of debt governance have an effect on the relationship between the finance executive tie and performance enterprise. The seventh chapter is the conclusion of this paper.Chapter seven is the conclusions, shortage of research and outlook. Due to the real data availability, this article does not study the different directions of finance executive tie that from financial institutions to enterprise or from enterprise to financial institutions, as well as the difference between credit financing and debt governance from the finance executive tie with different types of financial institutions. These are the shortages of this article, but also the focus of follow-up study. We believe, along with the more rich of finance executive tie data, we will be able to conduct a more comprehensive study of the issue.In short, this paper deepens the research of chain board theories from category hierarchy, and expands the relationship between enterprises and financial institutions from the legal person to nature person executive, which promote the measure validation of the two relationships. Similarly, investigation on the effect of debt governance of financial institutions the finance executive tie still promotes the measure validation of debt governance of financial institutions and enriched the research of the relationship between enterprises and financial institutions and debt governance of financial institutions. At the same time, in the credit system of China, this paper discusses how to exert the effect of debt governance, and reduce the agency costs of the managers by the finance executive ties, and takes it to the process of the gradual reform of China’s financial institution, to study the relationship between the finance executive ties and the financial development, and enriches the research of the financial institution debt governance theory.Practical implications of this paper are that we need to match the corresponding supervisory mechanism, while easing constrain of enterprise external financing, which help the efficiency of fund allocation to increase. In addition, deepening the stock right of financial institution reform in China, decreasing the government intervention to institutions and improving the developing level of finance in every area could promote the positive business development of enterprises in China.In addition, although we find that finance executive tie has a stronger role in credit financing and debt governance for private enterprises, and can improve enterprise performance better, but compared with the state-owned enterprises, the phenomenon of finance executive tie is less. Thus, in the background that China’s private enterprises face more serious credit financing constraints, there is more practical significance to encourage private enterprise build finance executive tie to relieve external financing constraints and reduce agency costs.
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