Heterogeneous Social Capital And Cost Of Equity Capital

At present,the downward pressure on China's economy has increased significantly.Several major economic indicators have reached historical lows.The grim macroeconomic situation has brought an important influence on microeconomic entities.In order to improve the vitality of the real economy and promote sustainable economic growth in China,the state has proposed to continuously advance structural reforms on the supply side and "reduce the cost of micro-subjects on a large scale." The cost of equity capital,as an important part of corporate costs,is a key reference indicator for enterprises to evaluate investment projects and choose financing methods,and is closely related to the operation and management of enterprises.And because of the equity financing preferences of Chinese enterprises,research on the factors affecting the cost of equity capital has been a hot topic.How to reduce the cost of equity capital and alleviate corporate financing pressure is of great significance to increase market vitality and promote the sustainable and healthy development of the capital market.This article uses the Shanghai-Shenzhen A-share non-financial listed companies from 2010 to 2016 as a research sample,and examines the difference in the impact of heterogeneous social capital on the cost of corporate equity capital,starting from the different subjects forming the social relationship network.The study finds:(1)Heterogeneous social capital has differential effects on the cost of corporate equity capital.Power social capital has a significant positive correlation with the cost of equity capital,while market social capital has a significant negative correlation with the cost of equity capital.(2)The nature of property rights has different effects on the relationship between heterogeneous social capital and the cost of equity capital.The relationship between the power of social capital and the cost of equity capital is more significant in state-owned enterprises,while the relationship between the market-based social capital and the cost of equity capital is more significant in non-state-owned enterprises.(3)The external environment affects the relationship between heterogeneous social capital and the cost of equity capital.The external environment can be divided into environmentally inclusive marketization process and environmental uncertainty showing environmental dynamics.Combining the two dimensions of the environment,it is found that when the marketization process is low and the environmental uncertainty is high(the external environment is more Poor),the positive correlation between the power of social capital and the cost of equity capital is more significant,and when the marketization process is high and the environmental uncertainty is low(the external environment is better),the negative of market social capital and equity capital cost The correlation is more significant.(4)Further in-depth analysis finds that the regulation of the external environment is different under different property rights.The adjustment effect of marketization process and environmental uncertainty on the cost of power social capital and equity capital is more significant in state-owned enterprises,and the adjustment effect on market social capital and equity capital cost is more prominent in non-state-owned enterprises.(5)Through the test of the intermediary effect,it is found that the power of social capital can increase the cost of equity capital by increasing agency costs,while the market of social capital can reduce the cost of equity capital by reducing information asymmetry.In this paper,by studying the influencing factors of the cost of equity capital of enterprises,it has to some extent made up for the lack of research in the field of social capital and the cost of equity capital.While enriching the relevant theories,it also helps companies effectively prevent social capital risks and reduce the cost of equity capital.Suggestions.Further combining the nature of property rights and the external environment to analyze the relationship between heterogeneous social capital and the cost of equity capital,it provides a reference for companies to build a dynamic adjustment mechanism of social capital by combining their internal and external characteristics.This conclusion is not only of great significance to enterprises,but also provides theoretical support and relevant evidence for government departments to improve administrative management efficiency,realize the transformation of service-oriented government,and investor investment decisions.