 Internal control reporting and cost of bond financing: Evidence from ChinaKun Tracy Wang, Yue Wu and Kin-Yip Ho International Review of Economics & Finance, 2021, vol. 76, issue C, 1323-1346 Abstract: Using a sample of Chinese listed firms and a difference-in-differences research design, we examine how internal control reporting (ICR) affects firms’ bond cost. We find that, during the voluntary ICR period, bondholders only reward voluntary disclosers perceived as having higher quality of ICR and internal control systems. In addition, during the mandatory ICR period voluntary disclosers experience a significantly lower cost of debt than that of nonvoluntary disclosers, which may be explained by voluntary disclosers’ higher quality of internal control. The difference in debt cost is more pronounced when firms operate in high litigation risk and competition-intensive industries, and when the firms’ information environment is weak or the bondholders have a high demand for ICR information. Keywords: China; Cost of debt; Disclosure regulation; Information environment; Internal control reporting (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:76:y:2021:i:c:p:1323-1346 DOI: 10.1016/j.iref.2019.11.016 Access Statistics for this article International Review of Economics & Finance is currently edited by H. Beladi and C. Chen More articles in International Review of Economics & Finance from Elsevier |
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