A Correlation Study On Features Of The Board And Debt Financing Costs Based On The SME Listed Companies

The development of enterprise is closely connected with the capital, especially for SMEs. In recent years, the rapid development of China’s SMEs which involves a wide range of industries play an inestimable role in enlivening national economy, increasing employment opportunities, innovating knowledge and technology, expanding domestic exports. However, due to the small scale, low level of credit, the establishment of a short time, high operating risks and other unfavorable factors, SMEs have many obstacles in financing. Facing the huge financing demand of the SEMs, how to improve the financing efficiency has become the focus.With the positive effect of debt financing, more and more companies have begun to focus on the debt financing. In debt financing decisions, their key concern is the cost of financing. The high cost will reduce the financing efficiency to some extent and hinder the company’s expansion and the improvement of performance, which is bad for the company. Therefore, the study of how to reduce the company’s debt financing costs has important practical significance.As a core decision-making body in the company, the position of the board of directors is obviously important. According to the researches, the structure of the board of directors, its behavior and other characteristics have an impact on the company’s debt financing. SME board listed companies represent the mature SMEs. There is few studies about the relationship between board characteristics and the debt financing cost that can put forward some advice to SMEs to improve the board of directors’s governance and improve the debt financing efficiency.This paper selects the data which related to SME board listed company from 2010 to 2012. Proceed from the Board, selected the board size, the annual meetings of the board, director of the shareholding proportion, the independent directors proportion, the separation of ownership as the board of directors characteristics, and then study its impact on the cost of debt financing. Using multiple linear regression model for empirical found that there is no significant correlation between the proportion of independent directors, the directors shareholding proportion and debt financing cost;board size is negative related to debt financing cost, annual board meetings; CEO duality is positive correlation with debt financing costs. Finally, according to the conclusion, puts forward corresponding suggestions from improving board governance perspective.