| Since 1990s, corporate governance plays more important role in improving governance efficiency and competitive ability. From modern theories of capital structure and corporate governance, debt financing proves to play a very important role in corporate governance. Now it is most important to study the corporate governance effects and their mechanisms of debts, because of ignoring the roles and their mechanisms of the creditors in former theories and practices on corporate governance, especially in China where the listed corporations with just poor performance have heavy debts but the ones with good performance have little debts, so the corporate governance effects of debts are worsening, the creditors are faced with heavy agent cost and loss. So this paper selects study on effect of debt financing on corporate governance in Chinese listed companies as its topic, which shows both theoretical and practical value in China.This paper firstly introduces the related theories of corporate governance and debt financing, based on financing theory of western company systemically analyses the effects of corporate governance of debt financing from two aspects: the motivation and the restriction to operators and restriction and control to shareholders, and finds that debt financing plays a positive role in corporate governance. Then this paper analyses influencing factors of governance effects of debt financing of Chinese listed companies in concrete economic environment in our country. Based on the theory analysis, this paper selects the listed companies in Shenzhen and Shanghai stock exchange from 2003 to 2005 as the research sample . By having regression analysis between corporate performance and debt situation, draws the following conclusions : (1) As a whole, debt financing does not constitute a large part of company financing, leaving some space to go;(2) Due to unreasonable debt structure, currently adopted methods in debt financing doesn't help up with corporate governance. |
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