The Research On Function Of Debt Governance In Listed Companies

Study on debt governance effect has become increasingly mature In Westerncountries, but in respect of corporate governance, China has been more tended equitygovernance, ignored the creditor governance. For this reason, this article draw thelessons from the Western scholars’ research experience, on purpose of exploring theeffects of creditor’s rights governance of Chinese listed companies. Based onprincipal-agent theory, incomplete contracts theory, analysis of creditor governancethe four effects, namely, incentive and restraining effect on business managers,signaling, threat of bankruptcy effects monitoring effects of and as against the debtor.Analyze governance effect of claims theoretically, in order to detect whether thecreditor’s rights governance of Chinese listed companies has played its due effect.Firstly this article comparatively analyze the two western classical creditorgovernance moulds. Followed, analyze the present status of creditor governance inChina,based on equity or debt financing preference, bond market maturity, thebankruptcy system and the role of the banks.on this basis, it research the effect of debtgovernance of listing Corporation. Regarding total assets liabilities ratio, bank loanliabilities rate, long-term liabilities rate and short-term liabilities rate as arguments,established linear relationship between arguments, Company performance indicatorsand Rate of Return on Total Assets. Selecting the enterprise scale and enterprisegrowth ability as a control variable to do a multiple regression analysis.The resultshows there exist negative correlation between the rate of assets and liabilities andmanagement costs in China. Reflecting the creditor’s rights governance of Chineselisted companies does have some effect on inhibition of on-the-job consumption. Bothof total assets liabilities ratio, bank loan liabilities rate, long-term liabilities rate andshort-term liabilities rate have a negative correlation with the total assets profitrate.That means the governance of creditor’s rights in our country is a failure. On the basis of the empirical analysis, analysis the failure of debt governance of listingcorporation. At the end of the article, putting forward some suggestions towards thefailure of debt governance of listing Corporation: Improve China’s bond market,Improve the corresponding legal protection system and give full play to the role ofbanks as creditors role.One of the main innovations of this article is putting the administrative expensesrate into the scope of the study on the effect of debt governance, more preciselyanglicizing of the effect of the agent principal creditor. The second one is regardingall of the a shares of listing Corporation (Except for ST, PT and the listingCorporation whose financial data is not complete) of our country which have beenlisted nearly three years as the subjects in the study, The samples are complete and theresult is more recapitulative.