An Empirical Research On The Influence Of Governanee Of Listed Companies On The Cost Of Debt Capital

Cost of unmatured development of securities market in China, equity financing can hardly meet the need of finacing of listed companies. Debt financing is still the major source of financing of listed companies in China. And the cost of debt concerns both the efficiency of financing and the performance of the companies. But recently, cost of debt capital seriously affect the listed companies’financing. Once the cost of debt capita on the high side, it will make the financing ability of the company to reduce. In the end, it will reduce the efficiency and the performance of the companies.Corporate governance mechanism is used to handle different stakeholders’ responsibility, right, profit relation.The core of corporate governance is to reduce the agency cost in modern enterprise management system. The researches at home and abroad indicated that, the cost of debt capital of listed companies is affected by the mechanisms of corporate governance. A high level of governance mechanism can reduce the company’s cost of debt capital in a certain extent. But in China, the corporate governance mechanism is still unmatured, and the effect is controversial.This paper selects the data of A share market from listed companies which are listed in Shenzhen Stock Exchange from2005to2009, uses the method of combining the normative research and empirical research, researches the influence of corporate governance mechanism on the cost of debt capital from the ownership structure, the board governance and the executive incentive. From the view of listed companies’ corporate governance mechanism, find the main problems, and on this basis, give the corresponding countermeasures and suSIZEestions, and lay the foundation to improve the cost of debt capital of listed companies.Empirical research of this study includes:(1) In the ownership structure variables, the state-owned shares and corporate ratio is positively related to the cost of debt capital; corporate shares ratio is not related to the cost of debt capital; the outstanding shares, the largest shareholder, and the previous five shareholding ratio are negative related to the cost of debt capital.(2) In the board governance variables, the size of the board governance and the two rank-one ratio are positively related to the cost of debt capital; the annual meeting of the Board, the Supervisory Board meetings and the proportion of independent directors are negative related to the cost of debt capital.(3) In executive incentive variables, the proportion of the board of directors and executive ownership stake are negative related to the cost of debt capital; the proportion of the board of supervisors and managers stake are not related to the cost of debt capital.According to the results of empirical findings, this study gave suSIZEestions on adjusting the state-owned shares of listed companies, improving the operational efficiency of the board of directors and executive incentive effects, etc. we are hope to improve the effectiveness of governance of listed companies, thereby reducing the cost of debt capital of listed companies.