Monetary Policy, Accounting Conservatism And The Cost Of Corporate Bonds

In January 2015, the China Securities Regulatory Commission issued The Measures for the Administration of Corporate Bonds Issuance and Trading(the revised edition), and the corporate bond market step into a period of great development.Bond financing is an important approach to external financing of listed companies in China. It’s of great significance to expand reproduction and improve the core competitiveness in listed companies by issuing bond at lower cost.Based on corporate bonds in China from 2008 to 2015 as the research object, this paper discusses under the background of agency theory, information asymmetry theory and the monetary policy transmission theory and creates a regression model to study the relationships between accounting conservatism and debt financing costs in the monetary policy of China.We also discussed the different impacts of accounting conservatism on corporate bond financing cost in different nature of the property. Finally, we draw the following conclusions:Firstly, the level of accounting conservatism can solve the problem of asymmetric i n f o r m a t i o n. With the improvement of accounting conservatism,cost of corporate b o n d s reduces. Secondly, compared with loose monetary policy, during the tight monetary policy companies will have a significant decrease in the company’s debt financing costs with the increase of accounting conservatism. Thirdly, in the period of tight monetary policy, compared with state-owned listed companies, the non-state-owned listed companies will have a significant decrease in the company’s bond financing costs with the increase of accounting conservatism.