The Study On The Effect Of Debt Financing On Corporate Governance Of Listed Companies

From modern theories of capital structure and corporate governance, debt financingproves to play a important role in corporate governance. This paper carries on inducing to therelated theories first of all, pointing out exist close logic contact between company's liabilitiesand its effect of corporate governance. Then there are a combine of theoretic and empiricalanalyses aiming at the circumstance of our country.This paper, using the data on ultimate shareholders disclosed by the listed companiesfrom 2002 to 2004, adopts the principle of ultimate ownership to classify the listed companiesas two groups: One is Family ultimate control and Nation ultimate control; Another is Centralgovernment control and Local government control.Then inquiring into the relation between ultimate control shareholders' types and theeffect of debt financing on corporate governance, we discover ultimate control shareholders'types of the listed company have an prominent impact on debt financing and its effect ofcorporate governance. After carrying on theories analysis, we carried on an empirical analysis,use the data of the listed companies from the Year 2002-2004, to examine 4 hypothesis, weconclude:(1) Family ultimate control's liabilities ratio is higher than Nation ultimate control's; (2)Family's control power is far small than Nation's control power; Moreover Family's controlrate dies down slightly or holds year by year, but Nation's control rate dies down obviouslyyear by year; (3) In spite of National ultimate control and Family ultimate control, theireffect of debt financing on corporate governance are all negative, but National ultimatecontrol's negative effect of debt financing on corporate governance is stronger than Familyultimate control's; (4) Central government control have larger control strength than Localgovernment control, expressing: Central government to take absolutely control to the listedcompanies as a lord, but Local government control more with opposite control to the listedcompanies as a lord; The listed company of Central government control comparing with thelisted company of Local government, its soft constraint of liabilities express more obvious. Itexpress that preventing from Central government's excessive administration intervention forstate-owned commercial bank, will be the point that the current state-owned commercial bank reforms.