Research On The Influence Of Bank Debt Governance And Corporate Internal Governance On Agency Cost Of Management

Under the modern enterprise system,not only the information asymmetry caused by the gradual separation of ownership and management but also the agency costs of management have become important problems that prevent the listed companies from moving forward.Corporate governance is the core link of modern enterprise system.Improving corporate governance can alleviate agency problem and thus reduce agency cost of management.At present,China’s corporate governance level still faces the low effectiveness,and the main cause for its low governance level is the lack of interaction between internal and external governance mechanisms.Besides,Chinese corporations neglect the role of external governance mechanisms,which leads to the failure to timely correct the problems of internal governance.In China,banks are the most important fund providers of listed companies.As a creditor,participating in debt governance can promote the improvement of corporate governance structure and level of corporate governance,together with effectively reducing agency costs caused by information asymmetry.At present the mechanism of bank creditor’s rights governance listed companies in our country is not perfect.The company’s internal management level is still low,leading to the agency problem and higher cost.It is a difficult issue to effectively protect the shareholders,creditors,employees,consumers and other stakeholders leading to a weak scientific nature of decision-making,along with low efficiency in resource utilization.To a certain extent,impedes the realization of the company’s business objectives.Therefore,it is of certain significance to study the influence of bank creditor’s rights governance and corporate internal governance on the agency cost of management.Based on the researches from both the domestic and foreign scholars,this paper takes 991 listed companies as research samples,collecting the related data of each sample in 2009-2019,the paper measures the listed companies’ internal governance index,management governance index,board governance index,board of supervisors governance index and major shareholder governance index by using projection pursuit,which are used to measure the internal governance,management governance,board governance,board of supervisors governance,major shareholder governance.Then,taking management agency costs as explained variable,bank creditor’s rights governance as explanatory variable,the internal governance,management governance,board governance,board of supervisors governance and major shareholder governance as intermediary variables,growth rate of total assets,return on total assets,fixed assets ratio,fixed number of year of the company’s business as control variables,The empirical analysis system model was established,Matlab2018a and Stata15.0 is used to empirically analyze the influence of bank debt governance and corporate internal governance on the agency cost of management,and bank debt governance’s mediating effect.The results of empirical analysis show that Bank debt management,internal governance,board governance,board of supervisors’ governance and listed company management agency costs are significantly negatively correlated.Major shareholders Governance and management agency costs were positively correlated the impact of management governance on the agency costs of listed companies’ management is not significant.Internal governance,board governance,board of supervisors’ governance,and major shareholder governance have partial mediating effects in the impact of bank debt governance on management agency costs.The Management governance does not have an intermediary effect in the influence of bank debt governance on management agency costs.Finally,this paper pointed out that companies should enhance the supervision mechanism of bank creditors and establish a reasonable salary incentive and evaluation mechanism,Improve the governance of the board of supervisors,standard the structure of board of the listed companies,the countermeasures and suggestions of optimizing equity structure,in order to effectively help the company to enhance bank debt management,optimize the company’s internal governance,and promote the management to reduce agency cost,promoting the sustainable development of company.