An Empirical Research On The Influence Of Financial Restatement And The Nature Of Property Right On The Cost Of Debt Financing

Debt financing is an important way to meet the demand of operation funds for listed companies; cost of debt financing will significantly affect the profitability of the enterprise.Creditor bank got information for evaluation of development and solvency through the financial report. High quality of information disclosure can reduce information asymmetry between enterprises and creditor bank. Emergence of restatement information, deepen creditor bank's distrust on enterprises' information, affect the cost of debt financing. In our country's economic environment, the nature of the property rights of listed companies will affect the cost of debt financing in a certain extent. Take bank long-term borrowing costs as proxy variable of debt financing cost, combined with the background of listed companies' property,investigate the influence financial restatements and the nature of property rights on debt financing costs. Improve the attention of listed companies and creditor banks to restatement information; make the debt financing cost more reasonable.The paper combines normative research with empirical research. First of all, the paper starts with the background and significance of research, reviewing the existing research literature. Second, the paper analyzes the influence of financial restatement and property to debt financing cost, using theories of information asymmetry, property, signal theory and principal-agent, and put forward the research hypothesis. Thirdly, the paper makes A-share financial restated listed companies as samples of research in Shenzhen and Shanghai stock exchange in 2007-2014, using the method of empirical research, and study the influence of financial restatement and property to debt financing cost with empirical research model.Considering the differences of nature of property right, the paper further studies the influence of nature of property to the relationship between financial restatement property to debt financing cost. The result shows that financial restatement changed evaluation of listed company, increase the possibility of losses for banks in the future, debt financing cost of listed companies increased significantly. Compared with non-state-owned listed companies,state-owned listed companies can get more preferential debt financing, the debt financing cost is lower. Based on the group of property rights, the result further shows that debt cost growthof state-owned listed companies is greater than non-state listed companies after restatement,nature of property rights did not weaken signal display effect of financial restatement.Through the above conclusions, banks and listed companies should improve attention to financial restatement, listed companies should provide high quality of information disclosure to obtain a lower cost of debt financing, Banks should pay more attention to restatement information while made credit decisions in order to reduce the risk of future losses. Regulate the information disclosure of listed companies, thus the debt financing cost can be more reasonable.