The Empirical Study On The Effect Of Debt Financing Structure On Equity Agency Cost Of Listed Companies

Capital structure theory think that financing structure can affect governance structure, thereby affect corporate governance effect. Debt financing is not only a important financing tool, and can play the role of corporate governance, and widely demonstrated and applied in abroad. In recent years, domestic scholars gradually research on corporate governance. For the research of the governance effect of equity financing, the research of the governance effect of debt financing still in primary stage. Combine with institutional environment and equity characteristics of listed companies, this paper deeply study governance effect of debt financing from the perspective on equity agency cost.First, the foreign and domestic literatures of governance effect of debt financing have been combed. Foreign scholars whose theoretical research of governance effect of debt financing has formed the mature system, they generally think that debt financing has a positive governance effect, and their empirical research has confirmed the conclusions of theoretical research; Domestic scholars whose research of governance effect of debt financing is scattered and fragmented, theoretical literatures are seriously inadequate, and their conclusions of empirical research have widely draw that governance effect of debt financing weakened or worsened.Second, the governance effect of debt financing on equity agency cost have been analyzed from the theoretical perspective. This paper focuses on theoretical basis of governance effect of debt financing:capital structure theory (traditional capital structure theory、modern capital structure theory and new capital structure theory) and corporate governance theory (traditional corporate governance theory and new corporate governance theory:stakeholder theory). Through the effect what debt financing can generate incentive, constraint, bankrupt and threat, analyze the effect of debt financing on equity agency cost, and distinguish different influence of different debt maturity on equity agency cost.Again, base the listed companies’ data in the Shanghai Stock Exchange and Shenzhen Stock Exchange from2008to2012, to do empirical research about the effect of debt financing. According to the effect of debt financing on equity agency cost, this paper propose the following hypothesis:(1) debt financing can generate significant inhibitory effect on explicit agency cost, debt financing can’t generate inhibitory effect for implicit agency cost;(2) different nature of ultimate holding companies’ debt financing can generate significant inhibitory effect on explicit agency cost, private ultimate holding companies’ debt financing can generate significant inhibitory effect on explicit agency cost, state ultimate holding companies’ debt financing can’t generate inhibitory effect on implicit agency cost, private ultimate holding companies’ debt financing can generate significant inhibitory effect on implicit agency cost;(3) short-term debt can generate significant inhibitory effect on explicit agency cost, long-term debt can generate significant inhibitory effect on implicit agency cost. According to the date, do descriptive statistical analysis on debt financing and equity agency cost and correlation analysis for variable, establish the regression model at last. Research conclusions:(1) debt financing can generate significant inhibitory effect on explicit agency cost, debt financing can’t generate inhibitory effect on implicit agency cost;(2) different nature of ultimate holding companies’ debt financing can generate significant inhibitory effect on explicit agency cost (private ultimate holding companies’ debt financing can generate significant inhibitory effect on explicit agency cost), different nature of ultimate holding companies’ debt financing can’t generate significant inhibitory effect on implicit agency cost;(3) short-term debt can generate significant inhibitory effect on explicit agency cost, long-term debt can’t generate significant inhibitory effect on implicit agency cost.Finally, draw policy recommendations to optimize the governance effect of debt financing. According to the research conclusions and institutional environment, specifically analysis the reason why governance effect of debt financing has not formed the observed performance of finance, and propose a series of practical and reasonable policy recommendations:restore market relationship between banks and companies, effectively promote market-oriented reform of state-owned commercial banks, improve relevant laws and regulations, play monitoring governance mechanisms of banks; improve the bankruptcy system and set the supervisor system, finally enhance debt constraints; improve the incentive mechanism and develop manager market; optimize the debt structure, gradually increase the proportion of long-term debt, promote diversification of debt types, finally enhance governance efficiency of debt financing.