Internal Control Quality,Ownership Structure And Debt Financing Cost

In order to develop,in addition to being able to use their own funds,external financing is also an important source of funding.External financing can be divided into two parts: equity financing and debt financing.In this way,companies can get the money they need to develop and reduce development costs at a lower cos.Research on debt financing costs can improve the competitiveness of enterprises to a certain extent and improve profitability appropriately.By affecting the links and effects in the business decision-making process of the enterprise,internal control will have a good or bad impact on the quality of the company's external disclosure information and corporate information,which in turn will cause the corresponding changes in corporate debt financing costs.The relationship between ownership structure and corporate governance is mutually influential and jointly promoted.A good equity and suitable structure of an enterprise can make the company's rules and regulations run more standardized,and a good governance mechanism can in turn reflect that the company forms a good shareholding structure.The difference in the ownership structure of individual organizations means that the organization has different organizational forms,which in turn makes the governance structure of each company being different,and ultimately affects the business behavior,efficiency and cost of the enterprise.Sound and effective internal control is the premise and foundation of the company's benign operation.The ownership structure will also have an important impact on the company's pipeline.Therefore,it is of great theoretical significance and realistic guidance value to study internal control quality,shareholding structure,debt financing cost and its correlation,This paper studying and drawing on the advanced theories of existing research results at home and abroad,basing on information asymmetry theory,the theory of credit rationing and foraging order theory,defines the basic concepts of internal control quality,shareholding structure and debt financing cost,and analyze the interaction relationship between them.On this basis,the combination of normative research and empirical analysis is used to conduct research.This paper selects all A-share listed companies in China from 2011 to 2017 as research samples,constructs multiple regression models through variable settings,and uses descriptive statistics and Pearson correlation analysis,multiple regression analysis to verify hypotheses.Through theprocess of hypothesis,analysis and demonstration,the following results are obtained:(1)Under the condition that other control variables are unchanged,the internal control quality of the enterprise is negatively correlated with the debt financing cost.(2)Under the condition that other control variables are unchanged,the company's shareholding structure is negatively correlated with the debt financing cost.In this paper,the equity concentration degree is used to indicate the different ownership structure of the enterprise.(3)Based on the premise that the first two assumptions are verified,under the different ownership structures,the impact of internal control quality on debt financing costs is different.In order to ensure the reliability of the research results,after the verification hypothesis is established,the article further tests the robustness of the research results by means of substitution variables,which makes the results more reliable.At the end of the article,a summary and reflection were made.In this paper,when trying to solve the financing problem of the company,using the equity structure as the adjustment variable and including the internal control of the company and the debt financing cost into one framework,discussing the impact of the internal control quality and the shareholding structure on the debt financing cost.So as to provide more effective policy recommendations for company financing decision-making.