The Effect Of Debt Financing On Corporate Governance In China's Private Listed Companies

According to capital structure theory and corporate governance theory, debt financing can effectively improve efficiency of corporate governance. This paper first quotes and analyzes the Western capital structure theory and corporate governance theory. In the basis of these analysis, The mechanisms of improving the efficiency of corporate governance by debt financing lie in: debt financing incentive and restraint function, the debt financing "contingent control" function and debt financing signal effect. Then this paper comparative analyze two typical kind of models having the creditor participating in corporate governance: the capital market-based finance model and the bank intermediation-based finance model. The existence of these two models has its historical reasons and objective basis, Compared with these two model, This paper analyzes China's private listed company's debt financing structure and the corporate governance situation, we get that the corporate debt structure is unreasonable and the company management efficiency has not been fundamentally improved. In addition, this paper also analyzes the company's financial data and the result is: the effect of debt financing on corporate governance in China's private listed company have not been existed. From all above the paper ends with the reasons of the debt financing governance failure and the suggestions: develops enterprise bond market. Deepens the reform of the state-owned commercial bank, Improves safeguard system of debt pays off, Actively promotes the relevant supporting facilities.