The Influence of Corporate Governance and Independent Audit on the Cost of Debt

Biao Yu (), Tao-ying Peng and Xin Liu
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Biao Yu: Business School, Hunan University
Tao-ying Peng: Business School, Hunan University
Xin Liu: Business School, Hunan University

Chapter Chapter 30 in The 19th International Conference on Industrial Engineering and Engineering Management, 2013, pp 279-288 from Springer

Abstract: Abstract Using a sample of non-financial A-share listed companies in Shenzhen and Shanghai stock exchange between 2008 and 2010, this paper empirically analyzes the influence of corporate governance and independent audit on the cost of debt. The research found that both high-level of corporate governance and high-quality audit supervision can significantly reduce the cost of debt. And there exists a substitution effect between corporate governance and independent audit in affecting debt costs, that is to say, improve the level of corporate governance to reduce the cost of debt only established when audit quality is low, and does not hold in high audit quality. The research show that improves the level of corporate governance and audit quality is of great significance in solving financing difficulties for the enterprise.

Keywords: Audit quality; Corporate governance; Substitution effect; The cost of debt (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-38442-4_30

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DOI: 10.1007/978-3-642-38442-4_30

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