Research On The Influence Of Senior Executives’ Academic Background On The Debt Financing Cost Of Manufacturing Enterprises

The G20 said it will speed up efforts to build China into a manufacturing powerhouse.China’s manufacturing industry covers a wide range,the total amount of financing ranks the top of the industry,but affected by the characteristics of the industry,"financing is difficult" and "financing is expensive" prominent problems,if the capital market profit slowdown,financing will be more restricted.Debt financing cost is the compensation that creditors demand from debtors for the transfer of the right to use funds.It includes the consideration of the operation of enterprises,so it largely depends on the corporate governance of the management.According to the "top echelon theory",senior executives’ personal experiences will have an impact on corporate governance.In the early stage of the reform and opening up,there were a number of "Xiahaiist" entrepreneurs,who used to teach in universities or research institutes.Now,the number of academic executives in enterprises is increasing with each day.As a special group of "Xiahaiist",they have rigorous logic,high moral standards and self-restraint.Currently,few scholars discuss informal institutional factors,such as the characteristics of leaders,when studying the factors that affect the cost of debt financing.Therefore,from the perspective of senior executives’ academic background,this paper empirically studies the relationship between senior executives’ academic background and debt financing cost by taking the panel data of A-share manufacturing listed companies in Shanghai and Shenzhen from 2014 to 2021 as samples.The empirical study found that:(1)the academic background of senior executives can help enterprises to obtain lower cost debt financing.The above conclusion remains valid after considering the endogeneity and conservatism.(2)Compared with enterprises with better external supervision environment,the reducing effect of academic background of senior executives on debt financing cost is more obvious in enterprises with weaker external supervision environment.Compared with enterprises located in areas with a higher or lower degree of marketization,Training managers in enterprises with lower marketization has a greater impact on reducing borrowing costs.(3)The mechanism test found that the quality of internal control and the quality of accounting information played a part of the mediating effect,that is,the academic background of executives reduced the cost of debt financing by improving the effectiveness of internal control and accounting information.According to the conclusions,countermeasures and suggestions are provided from the two aspects of enterprises and investors:(1)Enterprises should strengthen the introduction of academic executives,especially the enterprises with difficulty in financing,low degree of marketization and weak external supervision environment should pay more attention to the academic background of executives;Strengthen the independent cultivation of academic management talents;Improve the internal control system to reduce business risks;Pay attention to improving the quality of accounting information and fulfill the responsibility of information disclosure.(2)Investors should not only consider the internal governance of enterprises,but also pay attention to the management information and external governance environment,so as to make investment decisions.