Information Asymmetry, Debit Choice And The Development Of Debenture Market

As a foundation of finance market and a carrier of the monetary policy,the enterprise bonds market is very important to the development of capital market. For some reasons,the development of China,s enterprise bonds market not only further falls behind that of government bonds market,financial bonds market and stock market,but also differs from that of international corporate bonds market,thus brings unfavorable influence on both macro and micro facet of China,s economy. China,s enterprise bonds market is a thin market,that is to say,there are few sellers on the market,esspecially on the first market. As we know,information asymmetry in finance market leads to adverse selection and moral hazard which can influence the capital structure of corporates. This essay analyses the reasons for sluggish development of our enterprise bonds market from the view of information asymmetry,it tells us why the managers of the listed corporates were partial to acquire bankroll through stock market and how do asymmetric information influence the debt'sequential choice of enterprises,because of the cost,s increase which causes by information asymmetry,enterprises are partial to lend by bank loans,all these discussed above lead to deficient supply in subjectivity. Objectively,stern regulation,the lack of finance intermedium and mechanism investor further aggravate the situation. Then,this paper views that information asymmetry is essential reason which restrict the development of enterprise bond market. If we want develop enterprise bond fastly,we have to lower the asymmetry of information. To expand enterprise bond market,reregulation is essential,perfect legislation,independent judgemental process and intellectual investor are cruicial.