Do multiple large shareholders affect corporate bond yield spreads? Evidence from China

Xin Wang, Yan Xie, Di Song and Weihua Zhang

Pacific-Basin Finance Journal, 2022, vol. 73, issue C

Abstract: We investigate the impact of multiple large shareholders on corporate bond yield spreads. We find that the presence of multiple large shareholders lowers bond yield spreads. In cross-sectional analysis, we find that the impact of multiple large shareholders on bond yield spreads only exists in subsamples with severe agency costs, high default risk, and poor information asymmetry, indicating that multiple large shareholders (MLS) reduce corporate bond yield spreads by disciplining the expropriation of controlling shareholders and lowering information asymmetry. Overall, our findings document a positive economic consequence of multiple large shareholders from the perspective of debt financing costs.

Keywords: Multiple large shareholders; Expropriation; Information asymmetry; Monitoring; Collusion; Bond yield spreads (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:73:y:2022:i:c:s0927538x2200035x

DOI: 10.1016/j.pacfin.2022.101740

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