Study On The Influence Of Product Marker Competition And Auditor Reputation On Debt Financing Cost

Many problems will be faced in the operation of an enterprise,and the issue of funds is the most direct problem affecting its operation and development.With the opening of the Sino-U.S.Trade war in 2018,domestic companies have been impacted,continuing operations are facing difficulties,and operating performance has decreased while causing insufficient cash flow.At this time,companies may need to obtain external funding to maintain production operations and company development.And enterprises need to obtain funds,it is nothing more than two methods of debt financing and equity financing.Under the premise that the original equity structure and authority are not destroyed,the actual choice of enterprises is often to use bond financing.Under the downward pressure of the economy caused by the trade war,the competition between enterprises in the capital market has become more intense,which has also caused the company to have a strong "saving loan" motivation.In this regard,the company will adopt more strategies to help effective financing and reduce financing costs.Choosing a high reputation auditor is one of the targeted response strategies.As the high reputation auditors are in an increasingly fierce competition in the product market,the impact on creditors,especially the level of influence on the pricing effect of financing costs,needs further consideration.Furthermore,this article reviews relevant literature in recent years,and analyzes and proposes hypotheses based on the information asymmetry theory,information transfer theory,insurance theory,and orderly financing theory.The data of Shanghai and Shenzhen A-share listed companies from 2013 to 2018 is selected as samples To verify the hypothetical relationship between product market competition,auditor reputation,and debt financing costs.The final empirical findings: high reputation auditors can significantly reduce the debt financing costs of listed companies;fierce product market competition can significantly increase the debt financing costs of listed companies;further,product market competition negatively regulates the relationship between auditors’ reputation and debt financing costs.That is,under the premise of fierce competition in the product market,investors’ attention to auditors’ reputation has been greatly reduced.The research conclusions have certain reference value for reducing debt financing costs,improving resource allocation efficiency,promoting fair competition in the market,and maintaining sustainable and healthy economic development.