Perpetual Bond Issuance And Corporate Value

In recent years,the construction of Chinses multi-level capital market has been improved,and financial instruments have been increased,which broadened the direct financing channels for enterprises,promoted and supported direct financing of enterprises.Therefore,the real economy is developing steadily.Perpetual bond first issued in China since 2013.Because of its advantages such as being included in equity assets and breaking financing restrictions and so on,it is booming in China.However,due to its high coupon interest and additional interest rate jump mechanism also bring a lot of pressure for enterprises to repay the principal and interest.This paper has a strong theoretical value and practical significance to deeply study the impact of perpetual bond issuance and corporate value.This paper selects the annual panel data of a total of 490 non-financial listed enterprises from 2013 to 2020,and empirically analyzes the impact of perpetual bonds issued by enterprises on the value of issuers from short-term and long-term dimensions using the Event Study and Multi-period DID;innovatively uses the Mediation Effect Model to study the possible influencing factors of perpetual bond issuance and enterprise value,including bankruptcy risk and financial expense ratio;and analyzes heterogeneity,including enterprise nature,using Grouped Regression Model and Triple Difference Model to analyze heterogeneity,including enterprise nature,location of the business,etc.The main conclusions of this paper are as follows: The results show that:(1)the issuance of perpetual bonds can significantly increase corporate value in the long-term dimension.(2)the issuance of perpetual bonds by enterprises can improve enterprise value by reducing the financial expense ratio and bankruptcy risk.(3)the effect varies with the heterogeneity of enterprises.For non-state-owned enterprises,the value improvement effect is better than that of state-owned enterprises.For enterprises registered in the eastern region,the value improvement is better than that of non-eastern enterprises.Especially,financial innovation can reduce the problems caused by the imperfection of the financial market and can have a positive impact on the social economy,relevant departments need to resolutely promote financial innovation.