Research On Bank Creditor Governance Of Listed Companies In China

As the reforms of our country economic system gathers pace along with greater marketization and corporatization,there are serious concerns on how to improve and strengthen the corporate governance.The corporate governance has attracted the attention of both domestic and foreign academic and business societies.The supervision of creditor rights is widely used as a main component of the corporate governance mechanism,playing an important role in the management of modern enterprises.In China,bank loans are the main sources of debt companies' external financing.This paper focuses on the bank debt management.As a portion of creditor rights supervision,bank debt management can help to guarantee the safety of bank loans and reduce the agency cost of debtor.Can the banks in China monitor the debt companies effectively? Can the bank debt management help to reduce the agency cost of debt companies and further affecting their performance?To answer above questions,chapter 2 review the theory of corporate governance ?theory of debt and theory of the banks' supervision.In chapter 3,it makes the comparative studies between the bank debt management mechanism of bank dominated country and market dominated country.From chapter 4 to chapter 6,using quantitative and qualitative methods,we studies the relationship between listed companies' bank loan ratios and other indexes and reaches three conclusions.Firstly,based on the analysis of financial reports of listed companies from 2010 to2013,the study found that bank loans are sensitive to the changes of tangible assets of debt companies.The banks make adjustment of the loan sizes for the debt companies with profits shown up in their financial reports.This demonstrates that China's banks have certain supervision ability and can detect fraud or manipulations of companies.However,the supervision is lagged in time because of its reliance on publication of historical financial reports.Secondly,the study found that commercial banks' supervision of borrower companies has been significantly improved in the last four years in terms of reduced company management cost and Free Cash Flow.This is opposite to what is documented by other scholars from a similar study for a period of 1994 to 2010.This shows that governance of Chinese companies has improved.Thirdly,using the accounting statistics and sample studies,the analysis found the creditor rights supervision has little influence on the corporate financial performance.Finally,in the carpter 7,this paper makes policy suggestions in speeding up thetransformation and innovation of commercial banks,improving management of state-owned-enterprise and improving market environment for corporation development.The main innovations of this paper are as follows:First,after studying the changes of listed companies' financial data,we found the bank monitoring is lagged in time because of its reliance on financial reporting.It is difficult for banks to find the debt companies' current problems,which are hidden dangers to banks.Second,after studying the relationship between bank loan ratios and others indexes,we found the effect of bank monitoring on state-owned enterprise has improved,but it is still inferior to non state-owned enterprise.After further analyzing the scale of the listed stated-owned enterprise,we find that small listed state-owned enterprise is the main cause to the governance difference between state-owned enterprise and non state-owned enterprise.Finally we point out the direction to strengthen the governance mechanism of state-owned companies.Third,through the analysis between bank loans ratios and the performance indexes of debt companies,we found the agency cost of bank debt management is only a small portion of the operation cost of debt companies,the reduction of the agency cost has little effect to the debt companies business performance.Therefore we need to objectively judge the effectiveness of bank debt management.