An Empirical Study On Bond Intermediaries' Reputation And Corporate Bond Financing Cost

With the continuous improvement of China's financial market,the financing methods of Chinese enterprises are increasingly rich.Increasing the proportion of direct financing is one of the goals of building financial market in China.As an important way of direct financing,bond financing is more and more accepted by the market and enterprises.For most enterprises in our country,corporate bonds occupy the most important part,no matter from the number or scale of issuance.Therefore,studying the influencing factors of corporate bond financing cost has important significance in theory and practice.Based on the theory of information asymmetry,agency cost and signal transmission,this paper studies the influence of bond issuing intermediary reputation on bond financing cost.The issue intermediary reputation influences the bond financing cost through signal transmission in the information asymmetry market.According to the theory of information asymmetry,in the bond market,the issuer is in the advantage side of information while the investor is in the disadvantage side.The information asymmetry will lead to the problem of adverse selection,which will hinder investors to make a reasonable judgment on the issuer and make the bond pricing deviate.Although some laws stipulate that enterprises must disclose information in a timely and true manner to protect the interests of investors,the issuers are more willing to publish beneficial information due to the existence of egoism.The bond intermediaries are particularly important.As the intermediaries connecting the issuers and the investors,they play the role of information authentication and transmission.The intermediaries(bond underwriters,accounting firms and rating agencies)transmit the information of the issuers to investors through bond prospectus,audit report and rating report.According to the theory of signal transmission,this paper holds that when in a market with information asymmetry,choosing intermediaries of different reputations will send different signals to the market,and choosing a intermediary of high reputation will send the signal to the market that their operating conditions and financial indicators can withstand the authentication of a high reputation agency,thus reducing the cost of bond financing.This paper selects 3621 corporate bonds issued in Shanghai and Shenzhen Stock Exchange from 2015 to 2019 as research samples,and analyzes them through the combination of theory and practice.Through the analysis,we find that the high reputation bond issuing agencies(underwriters,accounting firms,rating agencies)can help to reduce the financing cost of bonds.At the same time,with the improvement of the reputation of accounting firms,the effect of improving the reputation of underwriters on reducing bond financing costs is weakening,while with the improvement of the reputation of rating agencies,the effect of improving the reputation of underwriters on reducing bond financing costs is increasing.