Financial Intermediation Reputation And The Cost Of Corporate Bond

Our country's IPO verification tends to be more precise.The equity refinancing structure is being optimized.Some innovation bonds such as green corporate bond,innovation and entrepreneurship corporate bond are booming.For many companies,corporate bond financing has become an important way.However,with the break of "zero default" of corporate bond,how to reduce the cost of bond and promote the healthy development of the bond market have become more urgent.Financial intermediation plays an important role in bond issuance,and reputation is an important aspect of doing jobs.In the process of replacing old growth drivers with new ones,we still need to continue to strengthen financing support for new technologies,new industries,new businesses and new models.Further development of the corporate bond market and promotion of the financial intermediation system are very important.Based on asymmetric information theory and signaling theory,on the one hand,financial intermediation reputation plays an important role in information authentication for financial information and non-financial information of the company.Companies can choose financial intermediation with high reputation to deliver companies' positive signals to the market better.On the other hand,reputation is a proxy variable of financial service product quality.Investors can choose information provided by financial intermediation with high reputation.These help to reduce information asymmetry of the bond issue market and increase market liquidity and safety,which will reduce the cost of corporate bond.A large amount of literature also shows that high financial intermediation reputation can reduce the cost of equity financing and debt financing.This paper divides financial intermediation into underwriter and auditor to study whether high reputation can reduce the cost of corporate bond.Based on the substitution effect between corporation and financial intermediation reputation,and the difference in financing ability,this paper studies the difference in the effectiveness between state-owned and non-state-owned enterprises,between listed and unlisted companies.This paper selects the data of public offering corporate bond on Shanghai Stock Exchange and Shenzhen Stock Exchange from the publication of Measures for the Issue and Trading of Corporate Bonds to the end of 2016 as the research sample.Referring to former literature,this paper selects bond credit spreads as the proxy variable of the cost of corporate bond,and selects "whether top10 underwriters","whether top10 auditors" as the proxy variable of underwriter and auditor reputation respectively.By using descriptive analysis,statistical analysis,correlation analysis and regression analysis,this paper draws the following conclusions.Firstly,the higher the underwriter and auditor reputation is,the lower the cost of corporate bond is.In other words,the companies that choose the underwriter and auditor with higher reputation for bond issue have a lower cost of corporate bond financing.Secondly,compared with the state-owned enterprises,the reduction effect of underwriter and auditor reputation for the cost of corporate bond is more obvious in the non-state-owned enterprises.Equity nature has a regulatory role for underwriter and auditor reputation mechanism.Thirdly,compared with the listed company,the reduction effect of underwriter and auditor reputation for the cost of corporate bond is more obvious in the unlisted company,Whether the company is listed or not also has a regulatory role for underwriter and auditor reputation mechanism.The discoveries of this paper provide new empirical evidence that explains financial intermediation reputation has an impact on the cost of corporate bond.In addition,The discoveries also provide the policy basis for how to reduce the financing cost of the issuer,further play the role of the financial intermediation reputation and promote the healthy development of the bond market.