Study On The Relationship Between Listed Agricultural Companies’ Debt Financing And Governance Effect In China

Many modern theories regard debt financing as a mechanism to improve corporate governance.Scholars have made a lot of researches on the equity impact of financing on corporate governancewhile ignoring the impact of the debt financing on corporate governance. And they are notconsidering the different impact of different debt structure on the corporate governance, but justthought that the different debt structure is homogeneous, and they didn’t make specific analysis andresearch. Therefore, this paper discusses the mechanisms of the various debts financing structure oncorporate governance from the aspect of overall structure of debt, the maturity structure of debt andthe source structure of the debt, and analyzes the practical effect of the different debt structure oncorporate governance from the structure capital of the China’s agricultural listed companies. It hopesfor providing a reference to optimizing the company’s capital structure and improving the companyperformance for China’s agricultural listed companies.This paper selects some agricultural data of listed companies from the Shanghai and ShenzhenStock Exchange between the year of2006and2010as a research sample, and chooses a number ofindicators of the debt financing, the financial performance and the corporate governance structure. Inorder to reflect the effect of corporate governance more fully, this paper builds a new comprehensivecorporate governance performance indicator by the method of factor analysis, and has an empiricaltest to examine the interaction between debt financing and corporate governance. The empiricalresults show that:(1)The relation between the overall level of debt financing of agriculturalcompanies and corporate governance shows significant negative.(2) The current liabilities have asignificant negative impact on corporate governance, but the long-term liabilities have a significantpositive impact on corporate governance.(3) The effectiveness of corporate governance of Bank loansand commercial credit is notable，and it can also explain the bank which is the firm’s major creditordid not alleviate the company’s agency problem, but aggravated the agency conflict of the listedcompany to a certain extent. Commercial credit financing also did not play its due effectFinally, the author tries to analyse the reasons of empirical results, and proposes somesuggestions about the optimization of debt financing structure of agricultural listed companiescombined with our actual situation, so that it can provide some reference and help to make decision ofour country agriculture listed company.