The Research On The Effect About Creditor’s Rights Of Bank In The Corporate Governance Of GEM Listed Companies

Enterprise should maintain normal operation with the funds support, so bank loans, as animportant source of enterprise fund, plays a vital role to the company’s survival anddevelopment. With China’s market economy developing rapidly in recent years, and thefinancial system deepening the reform, restructuring of state-owned Banks and joint-stockBanks, marked the improvement of the banking risk and the consciousness of management,and we must pay more attention to the protection of their own interests as well as to thedebtor’s constraints. As major creditors, Banks ought to play a role of the correspondinggovernance in the borrowing enterprise.In recent years, the scholars both at home and abroad have the attention about thecorporate governance effect of debt financing. Foreign scholars mainly decreases a lot ofresearch about the theory of corporate governance affect of debt financing, in order to analyzethe bank creditor’s rights monitoring for conflicts of interest between managers andshareholders of the total impact primarily. Domestic scholars focusing on the main boardlisted companies as research samples test the bank’s corporate governance effect andinvestigate its role in bank supervision, and the empirical results show that the bank creditor’srights in our country have the phenomenon of "soft constraints" claims. But for the corporategovernance effect of the gem listed company bank creditor’s rights in China studies isrelatively small, and we do not know whether the bank creditor’s rights and soft constraintsalso exist in the GEM listing company, therefore we need to further study and validation.This paper from the angle of bank creditor’s rights governance effect, based on therelated theory of debt governance effect, carried on the thorough research to the governanceeffect of the bank creditor’s rights to the GEM listing companies in China. Theoreticalresearch part mainly expounds the agency cost theory, free cash flow theory, signaling theoryand control theory, and it is concluded that the bank creditor’s rights in the aspect of corporategovernance has stronger motivation and ability, and it can help to the improvement ofcorporate governance. Empirical research part,based on the continued operation of2011-2013the gem listed companies as research samples, by refining the bank creditor’srights into short-term and long-term loans, empirically tests the relationship between bank creditor’s rights and corporate performance of listed companies, agency cost and t the freecash flow. Results show that the GEM listing companies in our country bank creditor’s rightsare negatively related with corporate performance, the short-term or long-term loans in bankdebt maturity structure, is also negatively related to corporate performance, and it shows thatthe bank claims do not play high performance on the gem of the listing Corporation. In theregression analysis of agent cost, a negative relationship between bank credit and agency coststates that the GEM Listing Corporation bank creditor’s rights have played an important rolein reducing the agency cost. Free cash flow, bank debt is negatively related with the free cashflow, bank credit can effectively restrain enterprise free cash flow. Finally, the paper, based onthe research conclusion, makes some suggestions in perfecting gem listed company debts totheir level of management and improving the total bank loans ratio appropriately andLong-term bank loan debt levels from the perspective of enterprise.