Implementation Of The Property Law And Corporate Debt Financing Cost:Theoretical Analysis And Empirical Test

Since the reform and opening-up,China has made great achievements in the construction and development of the market economy,but China's economic development is still constrained by the lag of financial development and imperfect legal system.In this context,whether the reform of the legal system can and how to effectively promote the development of micro-enterprises has been closely watched by the academic community and the government.In particular,the phenomenon of financing difficulty in China is very prominent.Whether the reform of legal system can effectively reduce the cost of corporate debt financing has not only a strong theoretical significance,but also has a very strong practical significance in the present China.China began to implement the "Property Law of the People's Republic of China" on October 1,2007.This provides us with a good research situation,whether the reform of property rights system can reduce the debt financing cost of enterprises in the process of marketization,and also provides a practical basis for us to examine how the dynamic changes in the level of property rights protection affect micro-enterprise behavior in the transitional economy.Therefore,based on the natural experiment implemented by the Property Law of 2007,this paper selects all listed companies in China's Shanghai and Shenzhen Stock Exchanges as research objects,and adopts a combination of normative research and empirical research to systematically analyze and demonstrate the relationship between the reform of property rights system and the cost of corporate debt financing.The empirical results of this paper show that:First,after the implementation of the Property Law,with the improvement of the level of property rights protection,the debt financing cost of enterprises is significantly reduced.Secondly,compared with state-owned enterprises and enterprises employing large-scale audit institutions,the implementation of the Property Law has reduced the cost of corporate debt financing,which is more significant in private enterprises and enterprises that employ smaller audit institutions.The structure of this paper includes the following parts:The first part is an introduction.This paper introduces the background of the topic and the meaning of the topic,explains the research content and research methods of this article,and expounds the innovation of this paper.The second part is a literature review.Sort out relevant literatures in the research fields such as the Property Law and corporate debt financing costs,and review them,then emphasize the research focus of this paper.The third part is the concept definition and theoretical basis.Firstly,expound the relevant institutional background of the "Property Law";secondly define the concept of corporate debt financing costs;finally introduce the theory related to this study.The fourth part is the theoretical analysis and research hypothesis.Theoretical analysis and elaboration are carried out for the research of this paper,and corresponding assumptions are put forward.The fifth part is the research design.Explain the sample selection and data sources of this paper,and then define variables and design multiple regression models.The sixth part is an empirical analysis.Through descriptive statistics,correlation analysis,multiple regression analysis and robustness test,the empirical results are analyzed and discussed.The seventh part is the research conclusions and policy recommendations.Summarize the main conclusions of this paper,then put forward corresponding countermeasures and suggestions,finally point out the shortcomings of this paper.The main innovations of this paper are as follows:First,this paper examines the economic impact of the implementation of the Property Law based on the new perspective of corporate debt financing costs,and adds new evidence to the literature on the economic consequences of the Property Law.Second,this paper provides an incremental evidence for the study of corporate debt financing costs by examining the relationship between the implementation of China's Property Law and the cost of corporate debt financing,and enriches the relevant literature on the factors affecting corporate debt financing costs.Third,the paper provides more powerful evidence for the economic consequences of the reform of the property rights system by using the implementation of the Property Law as a natural experiment and the double difference model as a research method.