Research On The Relationship Of Executive Financial Background And Bond Credit Spreads

In the process of enterprise survival and development,capital is one of the essential elements.Enterprises must obtain funds through financing activities,so scientific financing decisions play a very important role in the operation of enterprises.Debt financing and equity financing are the two most common ways in financing decision-making,and bond issuance,as one of the important channels for corporate debt financing,cannot be ignored.With the continuous development of the capital market,more and more rules and regulations regulate the bond market,so that its development momentum continues to be good.Therefore,the demander of capital is more and more willing to issue bonds in the bond market,and investors pay more and more attention to corporate bonds.In the bond market,for investors,of course,the most important concern is the issue of corporate bond yields.For corporate managers,the most important concern is the difference between bond financing costs and investors' expected returns,which can be reflected by corporate bond credit spreads.Although the rapid development of China's bond market,but due to late start,lacking management,imperfect system and market uncertainty problem,bond investors and bond issuers,information acquisition ability gap between further lead to bond investors don't understand the listed company operation degree deepens,the credit risk is bigger,so investors will take too much credit risk and require a higher risk premium.In order to reduce the degree of information asymmetry between bond issuers and bond investors,listed companies start to look for the non-institutionalized way of executive background to solve their own problems.In the complex and changeable economic environment,the advantages such as the specific values formed by company executives in the process of different employment experiences and the accumulated specific information chain are bound to affect the financial evaluation decisions of the company where the executives work,which include financing decisions and bond issuance decisions.Starting from the informal system of "senior executives' background",this paper studies whether senior executives with financial industry experience play a role in narrowing the bond credit spreads in the process of corporate bond issuance.At the same time,whether the difference of property rights will affect the relationship between the financial background of senior executives and the credit spread of listed companies' bonds is also worth pondering.Due to their high political status and natural resource endowment advantages,state-owned enterprises are more likely to attract,recruit and collect senior executives with financialbackground,while non-state-owned enterprises often have to rely on themselves and find it difficult to pool senior executives with financial background through their own strength.Therefore,compared with non-state-owned enterprises,financial background of senior executives in state-owned enterprises may have a more significant impact on bond credit spreads.Combining with the current situation in our country,combine the theory and empirical,enrich the executives background affect the researches of the issuance of bonds by listed companies,for the further research in the field of a senior financial background made certain contribution,and in order to solve the problems of the bond financing of listed companies to provide a new research perspective and also help enterprises improve the importance of informal institutions influence enterprise behavior.For this reason,this paper,by using multiple regression model for listed companies from 2011 to 2017,corporate bonds issued by the data analysis,finally concluded that:(1)based on the senior management team have a background in financial industry in number divided by the value of the total number of executives of listed companies to measure senior financial background,found that the situation of the listed company executives hired financial background is common,also verify the enterprise executives by hiring a finance background,can effectively reduce the bond financing cost,narrow bond credit spreads.(2)Introduce the property right factor,and find that the financial background of senior executives plays a different role in the bond credit spread in enterprises with different property rights.Specifically,compared with non-state-owned listed companies,the financial background of senior executives in state-owned listed companies has a more significant effect on reducing bond credit spreads.Innovation point in this paper,the main study is to:(1)in this paper,from the perspective of financial association,research enterprise executives hired a finance background to establish a link between the financial impact on bond credit spreads the informal system,different from the past research has focused on the more senior financial background on the impact of enterprise performance,enrich the senior financial background and relevant literature of bond credit spreads.(2)When studying the influence of financial background of senior executives on bond credit spreads,the property right nature is added,and the regulating role of property right nature in the relationship between the two is deeply discussed.(3)PSM was used to conduct endogeneity test on the data to ensure the robustness of the results,which made up forthe defect of unstable empirical conclusions caused by the neglect of endogeneity in the previous literature.(4)Previous studies on bond credit spread in literature mainly focus on the secondary market,namely the circulation market.This paper focuses on the primary market,namely the research on bond credit spread from the financial background of senior executives in the issuing market,which provides certain basis for listed companies to price bonds and reduce financing costs.