The Influence Of CFO Power On Debt Financing Cost

Financing is a topic that the academic circle researches widely,different from the direct financing methods such as equity financing,indirect financing through debt is a more mainstream financing way for most companies in our country.The phenomenon of difficult and expensive financing reduces the efficiency of resource allocation in the capital market and may restrict the development of the real economy.In this context,how to reduce the cost of debt financing is a difficult problem that enterprises have to face.Senior executives have a higher status in the company and are responsible for the daily operation of the enterprise.However,at present,most of the existing literatures on corporate executives are studied as a whole,or only independent directors or CEO,while there are few literatures on CFO alone.As the chief financial officer,the CFO mainly deals with the financial affairs of the company and plays the role of financial supervision.However,the reality is that CFO’s power is not in place,which directly leads to the CFO financial supervision function is not satisfactory.So will CFO power have an impact on the cost of corporate debt financing? How is this effect achieved?Therefore,in this paper,CFO power index is established through principal component analysis method from four dimensions of organizational power,ownership power,expert power and prestige power.Based on the high-level echelon theory,the A-share listed companies in Shanghai and Shenzhen during 2009-2020 are taken as analysis objects to establish A multiple regression model.This paper analyzes how CFO power affects the cost of debt financing and the mechanism between them.In addition,the robustness test of the research results was carried out by replacing explanatory variables and explained variables,and PSM method.The results show that CFO power is negatively correlated with corporate debt financing costs.In addition,CFO power reduces corporate debt financing costs by improving the transparency of accounting information.By analyzing and studying the relationship among CFO power,accounting information transparency and debt financing cost,this paper not only broadens the literature related to the influencing factors of debt financing cost,but also enriches the literature related to the economic consequences of CFO power from the perspective of accounting information transparency and debt financing cost.It also provides new enlightenment for capital owners to make reasonable investment decisions and for listed companies to improve the transparency of accounting information and make scientific and reasonable CFO hiring decisions.