Research On The Influence Of Bond Financing On Corporate Performance

According to the existence of intermediaries in the process of financing, the financing of enterprises can be divided into direct and indirect financing, and bond financing is a kind of direct financing. In China, banks still play a significant role in the financial system, therefore the status of bank loans is stable. As for direct financing, due to the different development degree of bond and stock markets in China, enterprises prefer equity financing to bond financing. However, efforts have been made to improve the status of bond financing. In 2007, the China Securities Regulatory Commission issued the "Experimental Approach of the issuance of Corporate Bonds" and in January,2015 the official "Management Approach of the Issuance and Transaction of Corporate Bonds" was promulgated, which is a revision of the earlier experimental approach. In future, to reduce the financing cost of enterprises, bond financing will certainly be promoted and so is the bond market.The main subject of this thesis is to discuss the influence of bond financing on the performances of the enterprises. This thesis is divided into four chapters. The introduction briefly describes the background, purpose and significance of the research, the methods and the structure as well as the innovations and deficiencies of the thesis. Besides, in this part, the existing results of foreign and domestic scholars are systematically summarized. Chapter one analyses the general theory of this thesis, including the concept, which explains corporate financing and bond financing specifically and theoretical analysis, which includes the theory of corporate capital structure and the theory of enterprise performance evaluation. Chapter two analyses the present situation of China’s bond financing as well as the problems and development of the corporate bond markets of China. Chapter three is the empirical analysis. It selects the data of listed companies which issued bonds during the period of 2011 and 2013 and established the regression equation to discuss the relationship between bond financing and corporate performances. The results show that in the low level of debt, bond financing has a positive effect on business performance, while in the high debt level, bond financing is negatively correlated with corporate performance.Chapter four is the conclusion and prospect of the research, and puts forward the policy recommendation to the development of corporate bond financing and the bond markets. The suggestions on corporate bond financing include:(Ⅰ) make full use of different financing methods and improve the participation of direct financing; (Ⅱ) utilize financial leverage properly and control the financial risks strictly. In addition, the suggestions on the construction of bond market include:(Ⅰ) improve the liquidity of the secondary bond market, and realize market pricing of the bonds; (Ⅱ) rich varieties of the bond market and expand the range of issuers; (Ⅲ) improve the information disclosure requirements and the risk assessment system; (Ⅳ) establish a scientific supervision system and simplify examination and approval procedures.