Bank-enterprise Relations, Government Behavior And Corporate Debt Financin

The Central Economic Work Conference in 2022 clearly stated that economic development should be stable,focus on stabilizing the macroeconomic market,and keep the economy operating within a reasonable range.Shifting from high-speed growth to high-quality development is a period of risk-prone and high-incidence.We must attach equal importance to stable economic growth and risk prevention.Enterprises are important starting points for economic policies.Debt financing is necessary to help enterprises grow and promote the high-quality development of the real economy.Based on the practice of China’s economic development,conducting indepth research and comprehensive discussions on the pricing,risk and level of corporate debt are significant to achieve a long-term balance between stable growth and risk prevention.Corporate debt financing is influenced by many factors.The current theoretical research mainly starts from the internal factors,based on the perspective of shareholder optimization,to analyze the capital structure trade-off and default risk.However,the practice of China’s corporate debt financing is significantly affected by regional and macroeconomic development as well as institutional factors.We must clarify the impact of government behavior to regulate the risks inherent in the high leverage ratio of the enterprise sector.Besides,it is imperative to strengthen cooperation between banks and enterprises to improve debt financing channels.For this reason,we expand the classic debt financing theory firstly to the perspective of creditors decision and secondly to the impact of government behavior,realizing the idea of gradually extrapolating to the peripheral decision-making subjects and regional factors.By incorporating the bank’s decision-making and the government’s behavior into the theoretical framework of corporate debt financing,we combine realistic elements with theoretical elements to construct strict theory models.The models use the method of stochastic optimal control to study the influence of bank-enterprise relationship and government behavior on the pricing,risk and target level of corporate debt financing.The contributions of this paper mainly include the following aspects:(1)We introduce the incomplete information into the bank-enterprise relationship model,and study the characteristics of corporate credit financing continuity,optimal loan rate and corporate value.Compared with existing studies,using incomplete information to describe the uncertainty of corporate income growth can better reflect the actual characteristics of bank-enterprise cooperation.Different from the existing research on the deposit and loan business,this paper focuses on the interaction of information supervision under the bank-enterprise relationship.We price the bankenterprise relationship more cleanly based on belief adjustment,and thus accurately study the impact of bank-enterprise partnerships on corporate debt financing.This paper provides a new theoretical interpretation of the "difficulty in financing" for enterprises from the perspective of information.At the same time,it helps to promote a more efficient bank-enterprise cooperation business and relax the corporate debt financing constraints.(2)This paper further relaxes the assumption for the fixed credit financing demand.In the bank-enterprise cooperation model,investment is introduced to describe the credit demand,and a semi-closed form solution of the optimal decision and value of both parties is given.The credit continuity provided by banks affects corporate value and investment motivation,while corporate investment determines the profit of banks.This interactive process makes both parties have their own optimal loan rates.The inconsistency of the optimal interest rate target provides a new theoretical interpretation for the "difficulty in financing" of enterprises.Furthermore,this paper examines the impact of information cognitive bias.The theory points out that the loss caused by information cognitive bias can be effectively adjusted by the interaction between bank and corporate investment decision-making.This interactive mechanism is an important reason why bank-enterprise cooperation can effectively overcome information asymmetry and cognitive bias,providing a new theoretical idea for solving the problem of "difficulty in financing".(3)This paper also focuses on regional factors,analyzing the impact of government bailout on corporate debt pricing and risk.This paper constructs a dynamic corporate model,by regarding government bailout as a real option,to integrate asset liquidity,government bailouts,and debt defaults into a unified framework.By providing shareholders with additional exit opportunities,government bailouts improve the asset liquidity of enterprises in disguise,thereby increasing the value of corporate debt and reducing the default risk.Further,this paper discusses the effectiveness of government bailouts.To balance the policy efficiency and the effectiveness of bailouts,it is necessary to prevent enterprises from completely relying on the government as a backstop,which will bring an excessive burden to the government.Avoiding the failure of bailouts caused by too low policy strength is also necessary.This article provides a policy reference for the governments to carry out effective bailouts and prevent the significant risk of corporate debt default.(4)This paper also focuses on the impact of economic growth pressure,as a regional factor,to study the relationship between local government’s growth target management and corporate debt financing targets.Theoretically,a two-sector model including "government-enterprise" is constructed.Empirically,this paper manually collects the economic growth target data of 281 cities across the country from 1998 to2013,combined with the database of industrial enterprises in China for empirical analysis,and investigates the impact of local government behavior on corporate debt.Theoretical and empirical conclusions agree that local government behavior under the pressure of economic growth significantly increases the leverage of enterprises in jurisdiction,leading to a tendency of over-indebted.This effect is stronger during economic downturns.The two support policies of financing subsidy and tax relief can effectively adjust the impact of government behavior on corporate leverage.This article provides a theoretical reference for promoting high-quality development and achieving a long-term balance between stable economic growth and risk prevention.