Financial Environment, The Governance Role Of Debt, And On-the-job Consumption

On-the-job consumption is one of the typical manifestations equity agency costs, although there issome value in the presence of executive incentive framework, but in the context of special system,on-the-job consumption problem becomes particularly prominent managers, lead a high agency costs, thecompany’s performance and market value had a negative impact. On-the-job consumption is one of thefirst class job agency costs performance, but the agency problem in the study, the focus on serving theconsumer is also less. As an important part of corporate governance mechanisms, debt management playsan important effect. But China’s bond market is not yet developed, the listed company’s main financingchannels for the bank borrowings. As most of the bank loans of corporate financing channels for corporatebehavior has a strong supervisory role, and thus the effect of treatment on the play, has its uniqueadvantages. In addition, to improve the financial environment may further enhance the debt managementfunction. In this paper, the financial environment from the perspective of bank debt financing of thisresearch governance for the on-the-job consumption..This article choice of Shanghai and Shenzhen A-share listed companies2007-2011data for the studysample, the results show: the overall size of the bank debt managers working on on-the-job consumptionplays a significant treatment effect, long-term loans than the governance role of short-term loans morestrong, it is because of the short maturities of short-term borrowings, less risk, the bank’s regulatorypower has weakened, while long period of long-term loans, banks are facing more uncertainty, and thusthe risk is greater supervision of banks lending companies have greater motivation; consider the nature ofproperty rights, as opposed to state-owned enterprises, the governance role of bank debt to non-stateenterprises more significantly, it is the bank problems caused by state-owned enterprises; of the currentmacroeconomic environment, our country is in economic transition, the merits of the financialenvironment would have a corresponding impact on the behavior of micro-enterprises, so this paperanalyzes the financial environment for macro background bank borrowings governance role of on-the-jobconsumption, research to improve the financial environment impact on governance from the perspectiveof the role of bank debt and financial development. Studies have shown that: the higher the level ofdevelopment of the financial district, bank loans to the governance role of on-the-job consumption isstronger, and the role of non-state enterprises more apparent.Contribution of this paper is to: provide new perspective of on-the-job consumption governance,promoting corporate governance theory first class sound development agency cost theory, but also toenrich and improve the theory of corporate finance, corporate governance theory, in addition toconsidering the macro impact of the financial environment, enrich and develop the study ofmacroeconomic policies and micro-enterprise behavior.