The Impact Of Providing Related Guarantee On The Financing Cost Of Corporate Bonds

The development of enterprises cannot be separated from the promotion of capital,with the rapid development of China's market economy.Relying only on bank loans and other indirect financing has been unable to meet the increasingly strong financing needs in the competitive market.More and more enterprises choose to issue bonds as a direct financing method to supplement the funds.Therefore,The size of the bond issuance cost has a growing impact on the investment and financing decision-making of enterprises.At the same time,the tightening of China's credit policy leads to enterprises being asked for guarantees when they are financing debts.In the guarantee behavior,which is mainly related to the guarantee,the associated guarantee is more and more concerned by investors and creditors when providing the financing of the related guarantee party because of its own hollowing out of corporate value and default risk transmission.Based on this,this paper proposes to explore the relationship between enterprises and the cost of corporate debt financing from the perspective of providing related guarantee behavior,and to explore its impact on this relationship from the perspective of institutionalenvironment.Then this paper analyzes the impact of property rights heterogeneity based on the special economic system of China.Based on the theory of information asymmetry,the theory of control income,the theory of signal transmission and new institutional economics theory,this paper constructs a theoretical analysis framework on providing the related guarantee,the institutional environment and the financing cost of corporate debt.This paper empirically analyzes the impact of providing related guarantee and institutional environment on the financing cost of corporate debt,based on the corporate debt data issued by The Shanghai and Shenzhen Stock Exchanges in China for 2007-2017.In addition,this paper also examines how the system environment adjusts the effect of providing related guarantee on the financing cost of corporate debt,and how the property rights of enterprises affect the effect of providing related guarantee on the financing cost of corporate debt under the specific institutional environment.The conclusion of this paper shows that the related guarantee,because of its value hollowing and risk transmission,causes the investor's attention to the contingent matter and demands higher risk overpayment.It increases the financing cost of corporate bond issuance.The institutional environment,as an external governance mechanism,deeply affects the risk assessment of the enterprises in the domain.The better the regional system environment,the lower the cost of corporate debt financing.At the same time,the institutional environment has a regulatory effect on the relationship between the two,and with the continuous optimization of the system environment,it will have a dampening effect on the discount effect of providing related guarantee behavior on the financing cost of corporate debt.The discount effect of corporate debt financing cost discount ingress in non-state-owned enterprises,where the existence of implicit government guarantee sits.So that investors do not pay too much attention to the hidden risk of providing related guarantees and increase the risk of overpayment.The possible innovation and contribution of this paper is mainly reflected in both theoretical and practical aspects:theoretical point of view,this paper innovatively verifies the mechanism of the impact of providing related guarantee,which is a contingent matter,on the financing cost of the corporate bonds,and enriches the relevant research.In addition,considering the macro-institutional environment,this paper comprehensively demonstrates the impact of internal and external factors on the financing costs of corporate bonds,which helps to expand the research perspective of bond financing costs.In practice,the research results of this paper help enterprises to pay more attention to the provision of related guarantees.Make careful decisions on the premise of fully considering the risks inherent in itself.At the same time,it helps to remind local governments to improve the regional institutional environment,improve financial regulatory policies,and guide the transformation of investors' ideas.All of the above will,to a certain extent,promote the reasonable control of corporate bonds financing costs and the efficient allocation of social funds.The research structure of this paper is divided into six parts:The first part is the introduction to research.Based on the historical evolution and reality,this paper puts forward the research topics of this paper and discusses the theoretical significance and practical value of the research topics.Then it introduces the methods,frameworks and ideas to be chosen in this paper,and explains the innovation of this paper.The second part is a literature review.This part is mainly aimed at the factors affecting the financing cost of bonds,the causes and consequences of related guarantees,as well as the institutional environment and debt financing related documents to comb and summarize and make literature comments.The third part is theoretical analysis and hypothesis.The basic theories of this paper include the theory of information asymmetry,the theory of control income and the theory of signal transmission,which make a specific theoretical analysis of the cost of providing related guarantee and corporate debt financing,the institutional environment and the financing cost of corporate debt,and the adjustment effect of the institutional environment and the heterogeneity of property rights.On this basis,four research hypotheses are put forward.The fourth part is the research design.This part mainly describes the data source and screening process of the empirical examination part of this paper,and constructs the research model,defines the research variables on the basis of literature review and analysis,and lays the foundation for the next empirical research.The fifth part is the empirical test results and analysis.The data used in this article is panel data.First,descriptive analysis and correlation analysis were performed based on the full sample and the subsample,respectively.Secondly,the OLS and group test methods were used to verify and analyze the four research hypotheses in the empirical test.Finally,in order to enhance the credibility of the research conclusions,this paper carries out the robustness test of the propensity score matching method,the disposition effect model and the substitution variable method.The sixth part is the research conclusions and prospects.Through the above empirical test,the conclusions of this paper are summarized and the research deficiencies of this paper are presented.At the same time,further research prospects and policy recommendations are proposed.