Control Structure,Tax Planning And Debt Financing Cost

In order to guarantee the good operation of the business capital chain,seeking ways to reduce the cost of corporate debt financing has become an important topic of corporate external finance.Based on the enterprise information,the fund provider judges the default risk level,and then determines the debt financing cost.The information asymmetry and agency problems faced by the financing parties will affect the judgment of the fund provider,and then affect the pricing of the debt financing cost.Therefore,it is of both theoretical and practical guiding values to study which factors can mitigate information asymmetry,reduce agency costs,and enhance the confidence of the financial providers to reduce the financing cost of the debtor.We believe that corporate tax planning behavior will convey important information on the company's potential solvency to the fund provider.There is an important relationship between tax planning behavior and corporate debt financing costs,but under different corporate control structure,tax planning also has different effects on debt financing costs.Among companies with concentrated control,tax planning can often be in line with the maximization of the shareholder value of the company within the limits of effective control of the ultimate controller.Therefore,the tax planning behavior under this institutional environment also conveys the potential strong solvency information of the company,thereby reducing the corporate debt financing costs.However,in companies with decentralized control,tax planning behavior may deviate from the maximization of shareholder value,which may result in the adverse consequences of weakening the company's solvency.Therefore,whether the company can raise the level of corporate governance,thus aligning the tax planning behavior with the maximum value of the company's shareholders,and thus reducing the cost of debt financing,is a matter of concern to us.From the theoretical and empirical point of view,and based on the institutional background of our country,this paper analyzes the impact of tax planning on the cost of debt financing under different corporate control structures.In the theoretical analysis stage,this paper mainly based on the principal-agent theory,M-M theory,pecking order theory,balance theory,management incentive theory,signalling theory and so on.This paper summarizes the existing research conclusions of domestic and foreign scholars,and puts forward the research questions of this paper.(1)There is a negative correlation between tax planning and the company's debt financing costs;(2)The structure of control has an important influence on the relationship between tax planning and debt financing costs;(3)In companies with decentralized control,internal governance can strengthen the negative correlation between tax planning and debt financing costs;(4)In companies with decentralized control,external governance can also have the effect of strengthening the negative correlation between tax planning and debt financing costs.The research significance of this paper mainly lies in:theoretically speaking,it has enriched the current research on debt financing,tested the substitution effect of tax planning on debt financing,and provided a new idea for debt financing cost research.From a practical point of view,China is advancing tax-bank interaction projects,and financial institutions can assess the company's loan capabilities and financing costs by obtaining tax information from the tax authorities.Therefore,the research in this paper helps financial institutions to correctly understand the impact of tax planning on debt financing costs and assess the potential debt and tender management of financing customers more accurately,thereby giving an appropriate financing cost with important practical guidance.Of course,due to the limitations of corporate finance costs and internal data acquisition in the context of the Chinese system,there are still some deficiencies in the accurate measurement of the data and variables studied.To address these deficiencies,the paper also proposes improvements and research perspectives.