The Effect Of Company Reputation On The Cost Of Debt Financing

In the current market environment,there is filled with fierce competition between listed companies.Capital is a necessary condition,if the listed companies want to survival and development for a long time in the market.The two important channels for listed companies to obtain capital are debt financing and equity financing.So,to study how to reduce debt financing costs is very significant to the listed companies,which is related to their long-term development.The debt financing costs of listed companies are affected by various factors,including the Internal governance of listed companies?external environment and so on.Company reputation as a hidden asset of the companies maybe is a factor which can affect the cost of debt financing.Based on these analysis,this paper examines how to reduce debt financing costs from a corporate perspective.In addition,after combing the relevant literature,we found that there will obtain different empirical regression results,if the listed companies are in different financial ecological environment.So,this paper takes the financial ecological environment as the starting point,and the financial ecological environment is divided into good financial and ecological environment and poor financial ecological environment.And then,this paper will study the different impacts of the reputation of listed companies on debt financing cost,when the listed companies are in different financial ecological environment.This paper takes the companies from the year from 2011 to 2015 listed on the Shanghai and Shenzhen stock exchanges(known as 'A' shares)as samples.And the main goals of this study are:(1)to study the impact of the reputation of listed companies on debt financing costs;(2)the samples will be divided into two groups according to the different financial ecological environment.And then to study the different impacts of the reputation of listed companies on debt financing cost,when the listed companies are in different financial ecological environment.Six parts are consisted of this paper.The first part mainly introduces the research background,significance of the study,the goal of this study,the possible innovation points and deficiencies.The second part systematically reviews the relevant research literature.The third part defines the relevant concepts,and elaborates the relevant theories,and then the hypotheses of this paper are proposed,based on these relevant theories.The fourth part is the research design.The main contents of this part are to determine the study samples,the data sources and the standards of screening the samples,the definitions of variables,and the building model.The fifth part is the empirical test and the analysis of the test results.The main contents of this part are the descriptive analysis of variables,the test of relevance between variables and the analysis of the results.The main contents of the sixth part are conclusions of this study and suggestions.this part firstly summarizes the results of this paper,and then puts forwards related advice.The two main conclusions of this paper:(1)A good corporate reputation can significantly reduce the cost of debt financing for the listed companies;(2)There is a difference in the impact of corporate reputation on debt financing costs,when the listed companies are in different financial ecological environment.When the listed companies are in a good financial ecological environment,the reputation of the company reduces the cost of debt financing more obvious than when the listed companies are in the poor financial environment.At the end of the article,this paper puts forward some related suggestions to the listed companies and government departments according to the results of this study.The suggestions are:(1)Chinese listed companies should pay attention to the company's reputation,and correctly understand the importance of corporate reputation,and maintain a good company reputation;(2)The listed companies and governments should pay attention to the construction of financial ecological environment.The relevant government departments should make a correct program to improve the local financial and ecological environment.The listed companies should actively cooperate with the relevant government departments to improve the quality of the financial and ecological environment where the listed companies are in.