Empirical Studies Of Chinese Corporate Debt Refinancing

In Chinese capital market has introduced short-term financing bonds, corporate bonds and medium-term notes and other bonds since2007. In this paper, we take these for the study objects. In the definition of "debt refinancing" and under the premise of the core concepts and analysis of its several manifestations. At first, the theoretical section of the paper describes the mechanism of the intrinsic link between the company debt refinancing, investment and corporate performance; After the analysis of debt refinancing market development process and the main problem of China’s listed companies.in the empirical section of the paper, using a variety of econometric empirical models such as the paired-samples analysis, logistic decision models and quantile regression model.deeply researches the effects of the specific factors affect the claims of China’s listed companies choosing refinancing, and empirically examines the debt refinancing of the size of investment and company performance. There are the main conclusions of this paper and point of view:(1) The points of the theoretical section of the paperis:Listed companies through a variety of debt refinancing, have eased the financing constraint status, improved corporate performance and increased the value of the company. Corporate debt refinancing, the corporate investment and performance are closely linked with the internal logic of unity.(2) After comparative analysis the different effects on company of debt refinancing and equity refinancing, we think thatWhen the capital market mechanism more robust, better legal system, a high level of corporate governance,better capital quality, company size larger, list companies prefer to debt refinancing; When the capital market mechanism is relatively sound, inadequate governance structure, the smaller size, listed companies prefer to equity refinancing.With the various legal systems of China’s capital markets gradually improving, the bond market has introduced a variety of bond products, especially after the split share structure reform of listed companies, the debt refinancing ratio will greatly improve.(3) through the review of the development process of Chinese debt refinancing market, especially China corporate bond market, we find that:China’s debt refinancing market has achieved rapid development since2005, but overall, smaller bonds issued by enterprises in China, far behind the issuance of stock in the same period, these form a striking contrast with the prosperity of the debt financing of the United States, Japan and other developed countries and the dominant compared to the relative decline of equity financing of capital market financing situation. At this stage, there are many problems of Chinese corporate bonds:first, the market size is too small, slow pace of development; second, the proportion of total stock market capitalization is smaller; third, the bonds issued by enterprises accounted for the proportion of the overall size of China’s bond market is also smaller. This is not conducive to bond market financing and resource allocation function effectively, but also restricts the balanced development of China’s capital market.(4) through the objects of70listed companies and70of the ratio of the company of the issuance of corporate bonds in China from2007to2010,using the logistic determine model, we empirically investigated the effect of the specific factors impacting China’s listed companies to issue corporate bonds.We found that, overall, the variables of listed company’s size, growth, the company’s ownership structure and financial leverage and so on, is the important factor to affect the company’s issuance of corporate bonds; Specifically, the effects of these variables affect the probability of issuance of corporate bonds are different:that is, the variables of the company’s credit rating, company size and the company’s ownership structure play an active and visible role in promoting on the probability of issuance of corporate bonds.the variablesof the company’s growth and financial leverage play a significant negative impact on the probability of the issue of corporate bonds. Level of the company’s cash flow has no effect on the probability of the issue of corporate bonds. By reselect the ratio of sample and replacement of the proxy variables of the explanatory variables, we can see that empirical findings are more robust, indicating that the empirical model set better.(5) We take the issues of corporate bonds and short-term financing bills of listed companies from2007to2010as the research objects, based on the assumptions that the company to issue corporate bonds and short-term financing bills are reflected in company debt refinancing, taking the corporate bonds and short-term financing bills as an important manifestation of China’s financial development, financial innovation, then based on the relationship between financial development and economic growth:"financial development can promote economic growth". By setting the Euler equation investment models of the listed companies in China, empirically analysis the effect of listed companies debt refinancing companies to investment.Here are the main findings:First, a significant positive relationship can be drawn from the investment and corporate cash flow, this proves that the existence of financing constraints in China’s listed companies, the more the sensitivity of the investment to cash flow,that more the financing constraints; Second, on the basis of the listed companies facing financing constraints, to join the cross terms of the debt refinancing and cash flow can be drawn,to some extent in terms of listed companies to issue corporate bonds and short-term financing bills, reducing the companies investment to the company’s internal cash flow sensitivity, easing the financing constraints.So the listed company debt refinancing company can alleviate financing constraints.(6) Based on2007-2010financial data of all A-share listed companies, we using of quantile regression analysis, empirically studies of debt re-financing on corporate performance. After controlling the effect of the variables of the bank loans, company size, level of investment, cash flowing water calm and company age and so on.We found thatrOverall, despite the measure of company debt refinancing of medium-term notes’s effect on ROA and return on ROE is not consistently significant, but corporate bonds and short-term financing bills play a positive role on ROA and on ROE.This indicates that company debt refinancing play a catalytic role in the yield of the company’s total assets.Through Through the lateral comparison analysis of these three coefficients, we can see that:On the average, on the effects of improving the company performance,short-term financing bills’s effect is the largest, followed by corporate bonds, medium-term notes is smallest. This reflects a variety of debt refinancing have different effects on corporate performance.It can be seen that,the listed company debt refinancing play a positive role in the company’s performance.This proves that in recent years, our government issue corporate bonds, short-term financing bonds and medium-term notes on Chinese listed companies is beneficial.The two proxy variables of the bank loans Sdebt and Ldebt play the role of supervision and corporate governance, basing on the effects of ROA and ROE. Moreover,short-term loans plays a greater role than the long-term loans in the corporate governnce;Through the total assets of business activities yield (OPA) to measure the corporate performance.Explanatory variables:the company debt refinancing of the three proxy variables are used in the measure the actual amount issued for value,Reestimated the Euler equation investment model, we found that the previous estimation conclusions are robust, which shows that China’s debt refinancing play a robust role in promoting the company’s performance.By combinating the conclusions of the chapter six and chapter seven, we can see that the claims of China’s listed continuous diversification of refinancing methods, broading the company’s refinancing channels, easing the company’s financing constraints, thus improving the performance of the company.This proves that the theory put forward by the company debt refinancing, the investment and corporate performance linkages between theoretical perspectives:on some extent.the company debt refinancing can alleviate corporate finance constraint, improve the investment environment, and thus contribute to the improvement of company performance.The innovation of this paper are:First of all, the angle of the topics is relatively new, on the basis of the core concept "debt refinancing", in summarizing the existing literature Inadequacies, we in-depth study the intrinsic link between the debt refinancing,investment, corporate’s performance.These theoretical exploration, deepening the theoretical study of the related fields of the company debt refinancing, making a good paving the way for the later theoretical exploration.Second, from the empirical findings of the paper, the conclusions about the influence factors on the debt refinancing, debt refinancing company investment and corporate performance and so on not only have strong practical significance on these parts:the development of China’s capital market, the company’s growth and investors investment behavior, but also to provide the policy implications for government departments to formulate relevant policies.Third, the data samples of the papers about Chinese listed companies is relatively new, the data in this paper mainly on the basis since2007, China launched corporate bonds, short-term financing bills and medium-term notes and other bonds, these data not only ensure the normal development of this thesis and empirical research, but also provide an important samples for depth discussion of the debt refinancing and other related issues.Fourth, the paper using a combination Econometric research methods:Such as logistic determine model and quantile regression analysis method Etc..the diversity of empirical methods ensures the robustness of our findings.