With the completion of the reform of the equity division, our security market has Further improved. The security market has come to be the main channel for the corporate finance. The convertible bond, as one financing instruments, is developing fast although it has not existed for a lone time. In this paper we examine the relation of corporate governance equality and the choice of convertible debt financing. We select 106 sample of convertible bonds to do the empirical research. The results show that weak corporate governance quality increase firm’s likelihood of issuing convertible debt. At the same time, we find the ownership concentration has negative impact on the firm’s likelihood of issuing convertible debt, and if the firm`s CEO is hired from outside the company then the firm has strong likelihood of issuing convertible debt instead of other financing ways. So these results yields that weak corporate governance quality firm may use convertible debt instead of improving its corporate governance quality to reduce agency cost, which is one of the main motives of firms to issue convertible bonds.Moreover, according to the results, we analysis the problem of convertible bonds market of China and introduce some suggestions on developing the convertible bonds market, which includes establishing a convertible bonds evaluation system, a sound restraint mechanism and introducing registering system for convertible bonds. |