| Bond financing is an important financing mode in China.Compared with equity financing,it has several significant advantages,including strong binding effect,adjustment lever and protection over the status of ownership.Compared with the loans of financial institutions,bond is a tradable security and has two significant advantages,including strong liquidity and low financial costs.Although the Chinese bond market has enjoyed rapid development in recent decade,its development scale falls greatly behind the stock market and financial loan market.Nowadays,China has regarded facilitating the development of corporate security market as a long-term strategic objective.Excessively high risk premium for bonds may severely impede the issuing of corporate bonds.Whether corporate bond financing can be evaluated and priced reasonably and normally determines corporate financing costs and the operation efficiency of Chinese bond market.Currently,the domestic research on corporate bond market enjoys a late start and lacks systematic and comprehensive theoretical analysis and empirical research.It is necessary to research corporate bond market in a more detailed and in-depth manner.The risk premium for bonds is basically determined by the possibility that a corporate is unable to fulfill its debt obligations.The research of predecessors mostly considers the impact of corporate financial information on the risk premium for bonds.However,the default possibility of a company is also determined by accurately evaluating the agency costs of default risks.In fact,the characteristics of corporate governance structure most represent the agency conflicts of stakeholders.Nowadays,institutional investors have been important shareholders of circulating stocks.As institutional investors have increasing professionalism and share-holding scale,institutional shareholding exerts increasing impact on corporate governance activities.With different investment objectives and concepts,institutional investors play different roles.On the one hand,institutional investors are capable of solving information asymmetry and play an active supervision role,which alleviates the interest conflicts between internal controllers and stockholders and lowers the risk premium required by stock investors.On the other hand,institutional investors are important shareholders,who adjust their objectives to be consistent with the objectives of managerial staff.As the profiting structure varies,institutional investors sometimes force internal controllers to adopt high-risk yet high-profit projects.As a result,it may cause conflicts between internal controllers and creditors.As corporate risks increase,default risks increase as well,which causes creditors to demand for higher risk premium for bonds.Currently,foreign scholars' research on how institution investors' stockholding affects the risk premium for bonds has made some achievements.Conversely,Chinese research on the economic consequences of institutional investors' stockholding behaviors lags behind and focuses on the positive and negative impact of institutional investors in the stock market.In addition,it seldom considers the impact of institutional investors' governance roles on the bond market.Based on the basic theoretical framework,the thesis reviews relevant research systematically and introduces the research background.Secondly,it analyzes the development status of bond market and institutional investors.Apart from elaborating on the necessity and inevitability for institutional investors to participate in corporate governance,the thesis also analyzes institutional investors' active and negative impact on the risk premium for bonds from the theoretical perspective.Thirdly,the thesis studies the impact of institutional investors on the premium risk for bonds from three perspectives: The first line studies the direct impact of institutional investors' stockholding behaviors on the risk premium for bonds.The second line studies the means by which institutional investors affect the risk premium for bonds from the perspective of corporate governance.The third line considers the differentiated impact of heterogeneous institutional investors' stockholding behaviors on risk premium for bonds.Lastly,the author puts forward policy advice based on research conclusions.Through the above studies,the main conclusions of this paper are:(1)Based on analyzing the development status of bond market and institutional investors,the author found out the bond market has enjoyed substantial development,yet still falls behind the stock market and loans from financial institutions.In addition,its development structure is unreasonable.Nowadays,institutional investors have been important power of the capitalist market due to large stockholding scale and widespread investment range.In addition,their stockholding behaviors become increasingly influential to corporate decision-making.(2)As is proved by empirical test,institutional investors' stockholding behaviors have direct impact on the risk premium for bonds.According to research findings,the higher the proportion of shares held by institutional investors,the more significant it lowers the risk premium for bonds.In addition,the longer institutional investors hold shares,the better they can supervise and significantly lower the risk premium for bond.In addition,there exist insignificant positive correlations between institutional investors' short-term shareholding and risk premium for bonds.According to the stability test that distinguishes the nature of property,state-owned enterprises have implicit guarantee,which forces institutional investors to pursue short-term benefits.Moreover,the behaviors of damaging corporate values remain unknown to investors.As a result,the short-term institutional investors increase their stockholding in non-state owned enterprises,which significantly increases the risk premium for bonds.Regarding stockholding stability,the author found out stable stockholding lowers the price fluctuation rate of corporate stocks and default risks.Conversely,the frequent trading of unstable institutional investors cause fluctuations in the bond market,which is unfavorable for bond investors to estimate corporate values and demand for a higher risk premium.Lastly,centralized equity enhances the impact on stockholding behaviors.(3)The author conducted an empirical test of how institutional investors' stockholding affect risk premium for bonds from the perspective of corporate governance.The author researched how institutional investors affect the risk premium for bonds through corporate governance from four aspects,including shareholder governance,manager governance,board of director governance and information environment governance.According to research findings,shareholder governance is the intermediate variable that influences how much long-term and stable institutional shareholding affects risk premium for bonds.Long-term and stable institutional investors may reduce big shareholders' fund embezzlement behaviors through supervision.It guarantees the interests of small and medium-sized shareholders and debtors,which result in lower risk premium for bonds.Management governance is the intermediate variable that influences how much institutional investors' shareholding proportion,short-term shareholding and stable shareholding affect the risk premium for bonds.Hence institutional investors' stable and high-proportion shareholding focus more on improving corporate values and may implement incentive plans to improve managers' sensitivity towards performance to achieve the objective.Although institutional short-term shareholding improves managers' sensitivity towards salary performances,the institutional investors of short-term may collide with managers to achieve short-term interest objectives,which harms long-term corporate values and increases the risk premium for bonds.Board governance is an intermediate variable that influences how much institutional long-term and stable shareholding affects the risk premium for bonds.An independent director serves as an optimal corporate structure.Further improving institutional investors' long-term and stable stockholding improves the interest protection over corporate stakeholders,including stock investors.One of economic consequences is to lower the risk premium required by bond investors.Information environment governance is an intermediate variable that influences how all institutional investors' shareholding characteristics affect the risk premium for bonds.Information is an important indicator for evaluating the probability for a company to make defaults and affects the risk premium for bonds.The most important source of collecting,using and transmitting information is institutional investors with professional investment background.Institutional investors are capable of affecting the bond investment evaluation by influencing the information environment,which further affects the risk premium for bonds.(4)The author conducted empirical test to find out how institutional investors' stockholding affects the risk premium for bonds from the homogeneity perspective.According o research findings,pressure-resistant institutional investors do not have business connections and have strong initiative for supervision.As the proportion of stockholding increases,it effectively lowers the risk premium for bonds effectively.Resistant institutional investors' long-term stockholding further lowers the risk premium for bonds.Resistant institutional investors' short-term stockholding offsets partial risk impact brought by short-term investment.Among all stable institutional investors,resistant investors are better at lowering the risk premium for bonds than sensitive institutional investors.Conversely,sensitive institutional investors have business connections with invested companies,which decrease the active impact from long-term stockholding on the risk premium for bonds.In addition,the short-term stockholding of sensitive institutional investors accelerates the risk of colliding with managers and increases the risk premium for bonds.The author put forward the following policy advice based on the theoretical analysis and empirical research results mentioned above.Firstly,the government should improve its supervision efficiency,develop the bond market and alleviate the financing difficulties faced by private enterprises.Secondly,the government should perfect the legal guarantee system for protecting investors.Thirdly,the government should set up a complete and systematic supervision and punishment mechanism to protect and increase creditors' wealth.Fourthly,institutional investors should be encouraged to participate in market investment activities,set up a diversified and free investment environment and improve the social efficiency of resource allocation to facilitate social development by maximizing values.Fifthly,the government should guide institutional investors to hold long-term and stable shares,cultivate active institutional investors and make the market more stable.Sixthly,the stock market and bond market should start with overall benefits and strategic distribution macroscopically,perfect the corporate governance mechanism and maximize stakeholders' benefits.Seventhly,the government should deepen the reform in state-owned enterprises and encourage the development of enterprises with mixed ownership to improve corporate operation efficiency. |
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