Research On Corporate Governance Relational Financing

Relationship financing is a kind of advanced financial instruments originated in the westerncapital market, in recent years, due to the development of Chinese socialist market economy, thetraditional arms-length financing, the decision of investment are based on the hard constraintsfinancial indicators, in the face of insufficient hardware but growing enterprises, they can notprovide enough support to meet its financial demand. At this time, the relational financing and thecorresponding have very strong realistic meaning for large enterprises, well-funded, and investorsrelations formed long-term cooperation to help them reduce financing cost, improve credit; thirst forfunds to support small and medium-sized enterprises, to provide relationship lending is more timelyassistance act, therefore relationship financing has a broad market and application value in ourcountry.But, because of the relationship financing itself has a monopoly of information and thecharacteristics of soft budget constraint, which pose a threat to the safety of investors funds, so thispaper analysis and explores how the relationship investors through involvement in corporategovernance to address this threat.Specifically, this paper through theoretical research method, the theory of dynamic andtheoretical basis of relationship financing in corporate governance, on the basis of relationshipfinancing is defined as:"the financial institutions in order to pursue the process of investment andfinancing information rent, long-term transaction, repeated game in the formation of specialinformation as the basis, a kind of financing" funding and so, and summarize the main characteristicof relationship financing. The main part of the thesis, firstly reviews the theoretical framework ofcorporate governance, external governance mechanisms, then the relationship financing long-term,focus on "soft" information, information use and information rent and the soft budget constraintcharacteristics, combined with corporate governance mechanism is designed between investorsintervention by decision mechanism, supervision of enterprises the incentive mechanism and the M&a governance mechanism, typical case analysis of the Enterprise Inc governance participation byinvestors, the mechanism can effectively improve the efficiency of corporate governance, reduce theagency cost.