Financial Shared Service Centers,Internal Control,Cost Of Debt Financing

With the deepening of "one belt and one road" and the going out of Chinese enterprises,especially under the major impact of the current 2019-nCoV epidemic on the world economy,the need for enterprise transformation is more urgent,and the Financial Shared Service Center,as an effective financial transformation tool,has become an inevitable choice.With the increasing support of our government for the establishment of Financial Shared Service Centers by group companies,the number of financial shared service centers in China has increased rapidly.At the same time,many academic literature and research reports suggest that the Financial Shared Service Center can strengthen the group's management and control,and effective control can alleviate the information asymmetry between the company and external stakeholders,and help enterprises to obtain lower cost of debt financing.However,the existing literature failed to empirical test the role of Financial Shared Service Center in promoting the internal control,and even fails to explore whether it affects the cost of debt financing of the company through internal control.The cost of debt financing is closely related to the growth and development of the company,which is the key to the successful recovery of the enterprise after the epidemic.Therefore,based on large sample data,this paper studies the impact of financial shared service center on the cost of debt financing,and explores the intermediary role of internal control in it,which has important theoretical and practical significance.This paper takes the non-financial A-share listed companies in Shanghai and Shenzhen from 2013 to 2018 as samples,collects the time data of Financial Shared Service Center by hand and crawls with Python,and builds A panel data model for empirical test,and performs heterogeneity analysis according to the degree of competition in different industries and the level of marketization.At the same time,this paper uses the model to further test the influence of the establishment of FSSC on the debt level structure,debt maturity structure and debt source structure.The research results show that the establishment of the financial sharing service center of listed companies has significantly reduced their debt financing costs,and the internal control has played an intermediary role in this process.The costs of debt financing companies in highly competitive industries and regions with low marketization levels have been reduced more obviously.Further test results show that the debt level structure has not been significantly affected after the establishment of Financial Shared Service Center of listed companies;however,the proportion of short-term liabilities in the debt maturity structure increases significantly and the proportion of commercial credit financing in the structure of debt sources has expanded significantly.Therefore,it is suggested that the government should continue to encourage qualified group companies to actively establish a financial sharing service center,and listed companies to accelerate the establishment of a financial sharing service center to seek lower-cost debt financing and a more reasonable debt maturity structure,as well as larger commercial credit financing.