Institutional Investors,Corporate Governance And Debt Agency Cost Of Company

With the rapid development of capital market in Occident developed countries since 1980,the scale of institutional investors expanded as well and became the main participator of capital market.As Increasingly development of institutional investors and the spread of shareholder activism,institutional investors has played more and more important roles in corporate governance and stabilization of capital market.Many countries treat institutional investors as a complementary mechanism of corporate governance,encourage them to participate in corporate governance,to supervise the decisions of operation and management,to balance power of large shareholders and managers,so that relieve the agency conflicts among stakeholders and ease agency problems.Under the background of the development of capital market and institutional investors,many academics focus on the governance function of institutional investors.As one of the shareholders,do institutional investors participate in corporate governance? Do they relieve the agency conflicts and decrease agency cost after take part in governance? There are differences between institutional investors in the source of found,the idea of investment and target of investment,which lead to heterogeneity of institutional investors.Are there any differences between heterogeneity of institutional investors in the governance function? The Equity agency cost caused by the conflicts between shareholders and managers,the debt agency cost caused by the conflicts between shareholders and creditors,could heterogeneous institutional investors relieve the agency conflicts between shareholders and creditors and effect debt agency cost? This dissertation takes Chinese listed companies and institutional investors as sample,discuss whether heterogeneous institutional investors participate in corporate,and if there any difference in the effect on debt agency cost;explore the intervening mechanism and specific behaviour of heterogeneous institutional investors influence enterprises' debt agency cost through different views,to understand the role of institutional investors in corporate governance.The main research contents of dissertation based on the following aspects:Firstly,based on Chinese securities market,the essay introduced the development process,current situation and change of environment system of institutional investors,introduced eight types of institutional investors in China and classification,the specific way of institutional investors participate in corporate governance.Based on the theory of corporate governance,principal-agent,capital structure,information asymmetry and financial constraint,theoretical analyzed institutional investors' effect on corporate governance from shareholder activism,analyzed the difference governance function and effect on debt agency cost between different types of institutional investors.Then,based on Chinese institutional investors,the essay empirical studied the effect of heterogeneous institutional investors on debt agency cost.We set up the empirical model of heterogeneous institutional investors and debt agency cost,investigate the different influence of independent/dependent and concentrate/disperse institutional investors on debt agency cost and analyse the reason for it.Next,the essay studied intervening mechanism between heterogeneous institutional investors and debt agency cost from the research perspective of financial constraint.Financial constraint is restriction when company needs external financing under condition of information asymmetry,financial constraint is directly related to the difficulty of firm's financing through borrowing,thus have an important effect on debt agency cost of the firm.In this part,we investigated the relationship between heterogeneous institutional investors and information asymmetry of company,then analyzed the relationship between heterogeneous institutional investors and financial constraint,and explored whether there are differences between heterogeneous institutional investors' effect on financial constraint;therefore further analyzed whether heterogeneous institutional investors affect debt agency cost through the intervening mechanism of financial constraint,that is if heterogeneous institutional investors impact debt agency cost caused by financial constraint.Finally,the essay studies the relationship between heterogeneous institutional investors and debt agency cost from the aspect of supervision.The shareholders and managers of company may invade creditor's interests through behaviors like asset substitution and under-investment,the more invade behaviors,the higher of debt agency cost.Institutional investors are effective supervisors of company,In this part,we studied if institutional investors restrict asset substitution and under-investment behaviors through supervision,compared and analyzed different types of institutional investors' influence on these behaviors;then further analyzed whether heterogeneous institutional investors affect debt agency cost through restriction of behaviors of asset substitution and under-investment.Through the above research,the conclusion are as follows:Based on the research of relationship between heterogeneous institutional investors and enterprises' debt agency cost,we found that there are heterogeneity between institutional investors,and there are differences between heterogeneous institutional investors when they take part in corporate governance;classified institutional investors as independent/dependent and concentrate/disperse,the result shows that independent and concentrate institutional investors participate in corporate governance,relieve the agency conflicts between shareholders,managers and creditors,this type of institutional investors are benefit for reducing the debt agency cost of the company,dependent and disperse institutional investors hardly participate in corporate governance and have little effect on debt agency cost of the company.Based on the research of intervening mechanism between heterogeneous institutional investors and debt agency cost,we found that heterogeneous institutional investors have difference effect on information asymmetry,financial constraint,and debt agency cost caused by financial constraint;independent institutional investors participate in corporate governance and broadcast information of company,they could relieve information asymmetry of inside and outside of company,decrease the debt agency cost caused by financial constraint,thus we judge that institutional investors affect debt agency cost of firms through the intervening mechanism of financial constrain;dependent institutional investors hardly participate in corporate governance and have little effect on debt agency cost of the company.Based on the research of relationship between heterogeneous institutional investors and debt agency cost through behavior of supervision,we found that institutional investors supervise the large shareholders and managers,have an effect on asset substitution and under-investment behaviors of company,and affect the debt agency cost owning to asset substitution and under-investment,but this governance function is heterogeneous;independent institutional investors ease the behaviors of asset substitution and under-investment,relieve the conflict between shareholders,managers and creditors of company,thus decrease the debt agency cost caused by asset substitution and under-investment.The main innovations of this dissertation are:(1)The former academics mainly used signal index as proxy variable to measure debt agency cost,this dissertation judge Chinese listed companies' debt agency cost by comprehensive index through asset-liability ratio,non-current debt ratio and financial expense ratio.(2)This dissertation took heterogeneity of institutional investors as study perspective,analyzed differences of heterogeneous institutional investors participation in corporate governance,broaden the research perspective of Chinese institutional investors participation in corporate governance in a sense,enrich the research system of institutional investors' effect on corporate governance.(3)Based on the governance function of institutional investors,this dissertation introduced information asymmetry,financial constraint and supervision in analysis framework,revealed the inside mechanism of heterogeneous institutional investors affect debt agency cost,and further analyzed differences of the insider mechanism between heterogeneous institutional investors.