Research on the Impact of Internal Control Quality on Corporate Debt Financing Costs
DOI:
https://doi.org/10.63313/EBM.2022Keywords:
Internal Control Quality, Audit Quality, Cost of Debt FinancingAbstract
In recent years, the instability of the international economic situation and the turbulence in China's domestic and external environments have caused a downturn in the domestic financial market, leaving enterprises facing the dilemma of "difficult and expensive financing". Therefore, based on the theories of information asymmetry, principal-agent, and signal transmission, this paper analyzes the impact of internal control quality on corporate debt financing costs, using listed companies on the Shanghai and Shenzhen A-share markets from 2019 to 2023 as samples. Empirical research finds that improving internal control quality can effectively reduce corporate financing costs. Meanwhile, from the perspectives of audit quality and nature of property rights, this paper analyzes their moderating effects on the relationship between internal control quality and corporate debt financing costs. The study reveals that the impact of internal control quality on corporate debt financing costs is more significant in enterprises with lower audit quality compared to those with higher audit quality. Furthermore, the impact is more pronounced in non-state-owned enterprises compared to state-owned enterprises. This research helps enterprises recognize the important role of internal control quality in corporate financing processes and enriches theoretical research in related fields.
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