The Research On The Corporate Governance Effect Of Debt Financing In The Transport Industries Listed Companies

The choice of financing structure influences interest and behavior of related parties in a company directly, while corporate governance is set to solve the relationship of these parties. So financing structure is closely related with corporate governance. As debt financing is one of the important financing ways, lenders of the company become one important party correspondingly who influence the corporate governance. Presently, the research on the corporate governance effect of debt financing abroad has been mature and widespread, but in our country, as the market is not well developed, debt financing and its ratio in financing structure do not attract enough attention and perfect corporate governance structure cannot be constructed. This paper use samples. So this paper carries out a research on the corporate governance effect of debt financing in the traffic industry companies, which listed on A type stocks traded in SH Exchange and SZ ExchangeThe thesis makes a thorough theoretical and empirical study on the corporate governance effect of debt financing. To be concrete, firstly, on the basis of theories of financing structure and corporate governance, the corporate governance effect of debt financing is extracted. Then the theories include of Agency Cost Theory, Incentive Theory, Asymmetric Information Theory, Power of Control Theory and Stakeholder Theory. Secondly, the thesis analysis the debt financing governance effect of the traffic industry companies combined with the actual situation. The economic system background of transportation industry makes western theory of debt financing governance cannot be copied. The concrete background is the imperfect mechanism of bankruptcy、the lack of Managerial equity incentive、the weakness Supervision of the creditors and the backward corporate bond markets.Then considering the reality of Chinese traffic industry corporations, three hypotheses have been given by modifying the corporate governance effect of debt financing partly. The first hypotheses is that the short-term debt has positive correlation with the proxy cost, the second hypotheses is the negative correlation between the debt ratio and the scale of investment in high project risk firms should be significantly smaller than the low project risk firms, the third hypotheses is the debt ratio has negative correlation with the corporate performance. By checking the hypothesis with the data from the traffic industry companies, some conclusions have been drawn. It shows that the short-term debt has positive correlation with the proxy cost, which is not consistent with the western literature. The reason is the weakness Supervision of the creditors, the imperfect mechanism of bankruptcy and the lack of Managerial equity incentive. In high project risk firms, the asset substitute effect is obvious, which is related to the macroeconomic environment of our country. And debt ratio has negative correlation with the corporate performance, which is not consistent with the signal effect. This is due to the soft budget constraint of Chinese traffic industry corporations.Based on the previous analysis of the problems, this paper makes some suggestions. The suggestions include:developing the enterprise bond market, especially enriching the variety of enterprise bond, optimizing the structure of corporate governance, improving the bankruptcy system, and building up a good credit environment.