Media Reports, Property Rights And Debt Costs

Debt financing plays a decisive role in the financing choices of Chinese enterprises.The high capital cost of debt hinders the pace of enterprises in the financing path,and thus lacks enough funds for production and business activities and investment activities,and ultimately limits the development of enterprises.High debt-cost will also reduce the attractiveness to the enterprises demanding for capital,leading them to abandon the high-cost debt financing,and finally resulting in low efficiency of national resource allocation,which leads to tight corporate funds and resource owners idle funds situation.In the circumstances of high level debt-cost of listed companies in China,how to reduce the cost of debt financing of enterprises is imperative.Some studies have shown that the level of information disclosure and corporate governance will have an impact on the cost of debt.The media as a corporate governance role outside the legal system,with information dissemination functions and corporate governance function,will inevitably become the influencing factor to the debt-cost.But previous studies often do not distinguish the nature of media coverage,or researching only from the perspective of positive reports or only from the visual angle of negative reports.At the same time,some scholars have found that the nature of different property rights has different impact on the debt financing constraints and debt financing costs.The existing literatures provide extensive and sufficient empirical evidence for the impact factors of debt-cost,but the important proposition about the impact of the interaction between media reports and the nature of property rights on the debt-cost has not been discussed in the literature.This article consists of five parts.The first part is the introduction,mainly introducing the research background,the significance of the topic,research methods,research framework and the main innovation,and defining the concepts related.The second part is the literature review,sorting out and commenting on the existing literature from the relevant research on media reports and debt-cost,the study related to the nature of property rights and debt-cost and the study related to the impact factors of debt-cost these three aspects.The third part is theoretical analysis and the research hypotheses.On the basis of expounding the related theories,this chapter analyzes the influence mechanism of the media reports on debt-cost,discusses the different impact of positive media coverage and negative media coverage on debt-cost,and discusses the impact of the media reports on the debt-cost of state-owned enterprises and the debt-cost of private enterprises,and then discusses whether the effect is different,and finally puts forward the corresponding research assumptions.The fourth part is the empirical analysis.In this paper,we take the A-share listed companies of small and medium enterprise board in China from 2011 to 2015 as the initial research samples.We test the impact of media reports,positive media reports and negative media reports on the debt-cost,and whether media reports have different impact on the corporate debt-cost of different nature of property rights.The fifth part is the conclusion and the suggestion,including the conclusion,policy suggestion and research prospects.The following conclusions are drawn in this paper.First,the media reports,positive media reports and negative media reports have all reduced the cost of corporate debt,and the effect of the negative reports to reduce the debt-cost is more significant;Second,the effect of the media reports to reduce the debt-cost of the private enterprises is more significant.According to the conclusions of the study,the following policy suggestions are put forward: First,enhance the independence,objectivity and self-discipline of media reports and improve the depth and breadth of negative media coverage.It is necessary to strengthen the media's freedom of discourse,create a fully competitive media environment to prevent the media manipulated by special interest groups.Second,deepen the reform of state-owned enterprises and promote the market-oriented reform of the financial system.It is necessary to weaken the administrative mode,reduce the "fatherly effect" and economic intervention of the government to the state-owned enterprises.And it is important to accelerate the market-oriented reform of the financial system,create a fair and just credit environment,promote the fair competition and sound development of state-owned economy entity and private economy entity.This paper enriches the literatures about the impact of positive media coverage and negative media coverage on debt-cost,and provides a useful perspective for the impact factor of debt-cost on the interaction between media coverage and property rights.At the same time,it is of great significance to establish the focus and direction of the deepening reform of China's listed corporate governance mechanism and guide the steady and healthy development of China's media industry.