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An Empirical Research on the Relationship between Independent Directors and Debt Maturity Structure

Author: DiYaPing
Tutor: LuoHong
School: Southwestern University of Finance and Economics
Course: Financial Management
Keywords: Independent Directors Debt maturity structure Corporate Governance
CLC: F276.6;F224
Type: Master's thesis
Year: 2010
Downloads: 194
Quote: 1
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Abstract

The stock market is the main listed companies, and its governance structure is directly related to the value of their own position, thereby affecting the interests of investors and the general health of the entire stock market. Our corporate governance structure is used in parallel mode and Supervisory Board, the Supervisory Board as a listed company's daily oversight bodies did not effectively restrict and monitor the board, making it a weak position in the company. Because the lack of oversight and checks and balances as well as listed companies in China unique \shareholders' interests and social interests of the incident after another, to a certain extent, sparked a crisis of confidence in listed companies, has become China's securities market resource allocation loss of function fully embodied. Since the 1970s in Europe, a series of famous historic bankruptcy of major companies incident raised the specter of corporate governance problems and deficiencies of reflection, the independent director system thus serve as an important institutional innovation introduced into corporate governance in the past. Independent director system is an important corporate governance system innovation. Independent directors is ag separation of ownership conditions in order to prevent \To further promote the standardized operation of listed companies to enhance the quality of listed companies, China Securities Regulatory Commission on August 21, 2001 issued an \full establishment of an independent director system. Is in economic transition in our case, the independent director system has its own particularity, it is the core of the internal governance structure, governance efficiency is directly related to its value and relevance of the subject company's interests. If the independent directors to effectively supervise management's debt financing behavior, the company will be more efficient allocation of capital, the company's value will be enhanced by the interests of creditors and debtors can be effectively protected. Since the debt maturity structure of debt financing decision an important part, so the independent director system is bound to affect the choice of corporate debt maturity structure. At the same time, at this stage of our research on the maturity structure of the debt is not rich, even for debt research, but also focused on the liability scale research, research for the debt structure is still very limited, in reality, corporate financing decisions also suffer from a lack of theoretical basis, is based on this theory and the reality of the lack of need for it leads to the research questions. This paper is divided into five chapters, each chapter reads as follows: The first chapter This chapter first describes the research background and significance. Empirical studies mainly on domestic independent director system and the correlation between the performance of the company, while the governance structure of listed companies as another important aspect - corporate debt financing research, mainly in the research firm characteristic factors on debt maturity select, this paper intends to existing research results, based on the research of independent directors on the impact of corporate debt maturity structure, therefore, has important theoretical and practical significance. Secondly, in order for the full text of the research content and expand the author of the study course, the author intends to major methods of documentary analysis and econometric models that expand the empirical analysis and other theoretical and empirical research. Chapter II Literature Review of the Independent Director System and debt maturity structure selected for a brief literature review and evaluation. Study abroad is also an independent director of the deepening of the selection mechanism for independent directors, independent directors and corporate performance correlations are no reliable conclusions. Relevant foreign debt maturity structure studies reviewed show that scholars from Western countries contract theory, asymmetric information theory, tax theory and duration matching theory perspective on the debt maturity structure were studied, research results are more comprehensive and rich. However, Western scholars in Western countries, after all, is based on the level of economic development and capital market developments, although capable of corporate debt maturity structure of theory and practice to provide a certain significance, but to solve our corporate debt maturity structure optimization problems, or to the actual situation of Chinese enterprises and combine. Domestic corporate debt maturity structure research is relatively new and worthy of study. Meanwhile, the domestic corporate debt maturity structure analysis of the factors affecting the company focused on the characteristic factors, the lack of corporate governance structure on corporate debt maturity structure choice affects the theoretical and empirical research. Chapter 3 Basic Concepts and theoretical basis which is part of the theoretical basis of full, first of all, the financing structure for independent directors and a conceptual explanation. Secondly, in the first chapter, based on literature review, this paper presents the theoretical foundation that is principal-agent theory as the theoretical foundation. Chapter IV of Independent Director System and debt maturity structure chosen empirical analysis in this chapter to empirical research method, using 2004-2008 data validation system of independent directors and corporate debt maturity structure choice relationships. Empirical analysis shows that independent directors to measure characteristics of the five variables, the independent directors of the age and level of education and qualifications that the choice of corporate debt maturity structure there is a significant correlation between the other three variables including independent directors attendance, remote and proportion of independent directors are associated with the choice of corporate debt maturity structure there was no significant correlation. Chapter conclusions and recommendations in the first half of the article based on the analysis, the corresponding policy recommendations. \with a real sense of independence independent directors. For this chapter the results of empirical analysis presented need to improve the qualifications of independent directors. Independent directors should have basic legal, economic and financial knowledge in order to make a real assertive own judgment in the choice of independent directors that the company should pay attention to their knowledge structure, independent directors should be the authority of the relevant industry, able to do a rewarding career judgment. Meanwhile, in order to ensure that the independent directors have enough time and energy to employ independent directors, you also need to take into account their age. The effective functioning of the independent director system is the key incentive mechanism for independent directors. Independent economic interests of independent directors to maintain independence is essential. In order to better ensure the independence of the independent directors, independent directors' remuneration for the author proposed the implementation of separation payment system, that the remuneration of independent directors of listed companies by a commitment by non-affiliated third-party intermediary payment. In the existing market economy conditions, the information is the most valuable resource of independent directors, too, receive adequate information in order to fully and properly exercise their rights objective, therefore, the author proposes a need to improve the independent directors to obtain sufficient information rights, on the basis of independent directors to ensure the accuracy and fairness of decision-making. The main contribution measure independent director system variables, the paper to avoid previous literature focuses only on the proportion of independent directors on a single variable, but in many ways, multi-dimensional measure up independent director system, the introduction of educational background including independent directors, independent directors attendance, whether off-site, the independent directors of age and the proportion of independent directors and other variables, a more comprehensive examination of the independent director system and corporate debt maturity structure relationships. Looking at the domestic debt maturity structure on the research results, specifically for independent directors and corporate debt maturity structure relationships little research, this paper as a research object, the maturity structure of the debt created a new focus and research fields. By 2004 - 2008 A-share listed companies Empirical Analysis, an independent director with a clear relationship between debt maturity structure, in order to deepen the independent director system research to further develop independent directors in corporate governance and financial decision-making role to provide a theoretical basis and empirical support. This limitation (a) the debt maturity structure of the limitations on the measurement method. As China's listed companies disclose information about debt maturity limitations, can not get information about a specific time limit debt. Given this situation, choose a long-term debt as a percentage of the total debt ratio to measure China's listed company's debt maturity structure. The results could have some impact. (2) independent directors and debt maturity structure of research should be a comparison with the relevant literature research ideas, but because very little relevant literature, the choice of the independent directors Characteristics of variables, this article does not choose to do on how the variables very in-depth discussion, the selected characteristic variables are independent directors representative, which further studies can be done a certain way for the variable filter to solve. (3) the limitations. As China's securities market started late, the development time is not long, the stock market behavior is not sufficiently standardized, so the study sample and data brings inherent limitations.

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