Litigation Risks,Media Attention And The Cost Of Debt Financing

China’s current credit market and legal environment are not perfect,litigation risk has become an important factor affecting the company’s operation and development.Legal litigation means high cost and only a sub-optimal solution to conflict.Once the respondent’s contingent liabilities caused by the lawsuit are turned into real liabilities,it will cause the company to lose wealth,disrupt the stable operating environment,interfere with the reasonable allocation of funds,and significantly increase the company’s risk level,which will undoubtedly increase the cost of external financing.With the continuous development of China’s equity financing market and debt financing market,debt financing has been favored in the financing process of listed companies by virtue of financial leverage and tax saving effect.However,there are still many problems in the financing process.The existence of litigation risk increases the uncertainty of the company’s operation and restricts the choice of the company’s financing strategy.With the continuous expansion of media power in recent years,media has become an important force in information dissemination,playing the role of external governance through information dissemination and external supervision.If the information of the listed company involved in the lawsuit is widely reported by the media,it will undoubtedly affect the company’s reputation to a certain extent,further affect the investment and financing of investors,which will affect the listed company’s financing ability and future performance development.Based on the above analysis,this paper studies the relationship between litigation risk,media attention and debt financing cost.This paper takes the existing litigation events of the company as the entry point,takes the companies in Shanghai and shenzhen a-shares from 2009 to 2017 as the samples,takes the litigation risk as the explanatory variable,and the media attention as the intermediary variable,and analyzes the impact of the litigation risk and media attention on the debt financing cost.The results show that the litigation risk of the company will increase the debt financing cost of the listed company;the company’s litigation risk will attract more media attention;media attention mediates the relationship between litigation risk and debt financing cost.The cost of debt financing is not only related to the realization of the interests of stakeholders,but also affects the financing efficiency of enterprises and the healthy development of market economy.The innovation of this paper is to break through the limitation of simply analyzing the influence of internal factors on debt financing cost,and study it from the perspective of law and media,providing reference for effectively controlling debt financing cost.At the same time,it deepens the external governance function of media attention,and makes a beneficial exploration for the research of debt financing cost of media attention introduction.