The influence of business environment optimization on corporate bond financing costs

Deli Kong and Xidian Li

Finance Research Letters, 2025, vol. 80, issue C

Abstract: This study empirically examines the impact of business environment improvements on corporate bond financing costs for corporate bonds, enterprise bonds, and medium-term notes issued in China between 2018 and 2023. The findings indicate that enhanced business environments contribute significantly to reducing corporate bond financing costs. Further analysis reveals that the financing costs of state-owned enterprises, larger enterprises, and enterprises with higher credit ratings are particularly responsive to the quality of the local business environment. By mitigating information asymmetry, business environment optimizations lead to lower bond financing costs for these enterprises.

Keywords: Business environment; Bond pricing; Credit spread; Bond financing cost (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:80:y:2025:i:c:s154461232500618x

DOI: 10.1016/j.frl.2025.107357

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