Empirical Study Of The Effect Of Debt Financing, Governance Of Listed Companies In China

Theory of capital structure is one of the most important modern theories of Finance, it has formed various kinds of theories and school of thought through the development for more than 50 years. With theory of corporate governance being brought out, the attention to study on theories of capital structure has been paid to its efficiency on corporate governance. In the domestic, the researches on theories of governance and ownership of share governance have been put particular emphasis and the results are very abundant, but the research on debt governance is still in its infancy stage. From debt financing angle, this thesis attempts to research the function and strength of debt governance in the listed company of our country.The thesis firstly reviews the capital structure theory and corporate governance theory, pointing out the logical relations between debt financing and corporate governance. On this basis, it then highlights the governance effect of debt financing in there aspects as incentive and restraint function, signal transmission and bankruptcy threat, and comparisons are made between different debt. The following part proceeds to an empirical research on governance effect of debt financing, sampling six hundred and fifty listed companies (from 2004 to 2006). Conclusions include: debt financing helps to reduce the agency cost to some extent, but it can't play an active role in signal transmission and bankruptcy threat in corporate governance. Finally, the thesis ends up with some suggestions to change the corporate effect of debt financing, such as reconstructing the relationship of bank-firm, perfecting the bankruptcy mechanism, ameliorating debt structure, developing the corporate bond market and manager market.