The Study On The Debt Financing On Effect Of Listed Companies' Equity Agency Cost

Financial Structure is closely related to Corporate Governance As the main mode of financing of enterprises, Debt financing have a major impact on Corporate governance。Therefore, study on debt financing has a major significance for improving corporate governance。In recent years, as China's market economy development, Chinese scholars on corporate governance more in-depth research. However, most literature focuses on equity of treatment effect, The control effect of debt financing should not be concerned about. This article from the perspective of agency costs, to study effects of debt financing governance.on the base of listed companies in China.Firstly,this paper summarizing the typical theories in the field of the effect of debt financing on corporate governance. The theoretical and empirical studies of control effects of debt financing a have been very mature in western countries, But, the control effect of debt financing is still the initial stage In China the conclude of the most of the research literature that the debt financing does not have the effect of corporate governance.And then on the basis of the theory, Discusses of the impact mechanism about debt financing on the agency costs. This paper related to agency cost theory,Motivation theory, signal transmission theory, control theory and Pecking Order Theory. Debt financing, mainly through the incentive effect of debt, Signaling effect and the threat of bankruptcy effect of agency costs of equity companies, and different debt maturity impact on agency costs are different. Short-term agency costs can inhibit a manager's job consumer behavior, Therefore inhibit the dominant agency cost。The long-term agency managers can effectively inhibit the over-investment behavior, Acting on the inhibit the hidden cost.Then, this paper using annual financial statement the date from 2006 to 2008 of listed companies in Shenzhen for empirical alysis.. an empirical research is confucted to fully test the governance effect of debt finanacing.Results show that the debt has strong role on corporate governance in china's listed companies; short-term debt mainly inhibit the dominant agency cost。 Because of China's bond markets are underdeveloped, administrative intervention, inadequate bankruptcy system and market managers underdevelopment and so. So that long-term debt is no inhibition on the hidden costs.Finally, the specific situation of China's listed companies, This paper makes the following recommendations:Accelerate the development of China's bond market; Improve banking supervision mechanism; improve the bankruptcy system; perfect manager incentives, develop market manager.