Research On Corporate Governance And Bank Loan Financing

At the background of China’s Transition Economies, bank loan has an absolute specific gravity in listed companies’ financing Subject to circumstances of laws and market. Bank loan is characterized as fast, stretch financing, and role of financing Leverage. So it becomes the most used financing channel. But with the development of reformation in finance, enterprises meet difficulty to get bank loan. Lots of listed companies have been found chain broken because that funds funding had not recruited in time. So to get more bank loan, many listed companies made up or colored their financial accounts. These facts mean that, to get bank loan is the essential need of enterprises’ managing. But the listed companies have difficulties in getting bank loan in our country.In 2008, the world financial crisis explored because of American Subprime mortgage crisis. The world financial storm told us that there were deficiencies in processes of bank’s risk identification, risk evaluation and risk control in many countries, to be completed. Deficiencies in commercial bank’s risk management would affect the country’s even other countries’economics negatively. Last world financial crisis had little influence on our country’s bank industry. But we also need to pay attention on the risk management of bank industry in our country.In sum, research on corporate governance and bank loan financing has double meaning in our country. Not only could it test if Chinese commercial banks’take corporate governance in consideration when they make loan decisions, but also urge enterprises to promote corporate governance to gain more bank loan financing with lower loan cost.There are five models in total, three to test if corporate governance has influence on bank loan amount of listed companies, the other two to test if corporate governance has influence on bank loan cost of listed companies. This paper use OLS to do regression test. The regressions show that rind (ratio of independent director), president doubles general manager, the greatest shareholders, state - owned share -holding rate and capital occupation of big shareholders have influence on bank loan amount and cost. Concretely, rind has a positive influence on bank loan amount, meaning that commercial banks have taken Rind into consideration in their loan decision. President doubles general manager has a negative influence both on bank loan amount and loan cost, meaning that commercial banks have taken President doubles general manager into consideration in their loan decision. The greatest shareholder has a negative influence on loan cost, showing that the greatest shareholder is a "grabbing hand" in china. So. banks will make a higher loan rate. The lower state - owned share -holding rate is. the more bank loan companies gain, showing that Chinese state - owned enterprises reformation is not through complete. The ill corporate governance in state - owned enterprises becomes a barrier to get bank loan. Capital occupation of big shareholders has a negative affect on negative influence on loan amount and cost, meaning that banks have intentioned the credit loan risk that capital occupation of big shareholders brings. So banks will curtail the size and uplift the cost of loan.The results of the paper give revelation to listed companies to recognize deficiencies in corporate governance, to get more bank loan with lower cost. According to the results of this paper, I give surgests to Chinese listed companies about independent derectors; president doubles general manager, the duty of monitors, the greatest shareholders, and capital occupation of big shareholders.