Research On The Relativity Between Corporate Governance And Debt Cost

The debt cost of the enterprise not only affects the efficiency of corporate finance, but als-o an important factor affecting the company's operating performance and long-term development.The factors that directly influence the level of the debt cost of the enterprise include the age-ncy problem and the problem of asymmetric information. At present, domestic and foreign sch-olars have carried out empirical studies have proved that a high level of corporate governance can effectively reduce the company's debt costs. The reason is that it helps to alleviate the co-nflict between the creditor and the company, and significantly improve the situation of informat-ion asymmetry between them. Through the analysis, it is found that most of the existing resea-rch results focus on the main board listed companies, whether the corporate governance of the GEM listed companies can affect the company's debt costs remains to be further studied.Based on the current research situation, this paper analyzes the influence mechanism of co-rporate governance on the debt cost, then takes the China Growth Enterprise Market listed co-mpanies during 2010-2015 as the sample, constructs the governance index reflecting the compr-ehensive level of corporate governance by principal component analysis, tests the relativity bet-ween governance level and debt cost by multiple regression model. Then, this paper examines the relationship between debt and corporate governance mechanism cost in four aspects by m-ultiple regression analysis. The empirical results show that high level of corporate governance can effectively reduce its debt costs .So, this paper argues that in order to reduce the cost of debt, GEM companies need to constantly improve their level of corporate governance. Specific-ally,the GEM listed companies need to optimize the structure of ownership structure,the board of directors, executive compensation incentives and information disclosure constantly.