| Summary: | 碩士 === 國立彰化師範大學 === 會計學系 === 100 === This paper investigates the impact of global operations on credit rating and cost of debt capital. When the firm engages in global operations, it will not only mandatorily increase disclosure level to conform to the regulations and the policies of the domestic and foreign Securities and Exchange Commission, but also voluntarily increase disclosure level to solve the problem of information asymmetry that caused by the complex environment. Therefore, the global firms have greater quality of information than the domestic firms to help reduce the default risk which creditor concern and improve the credit rating. Moreover, the rational creditors will be willing to reduce risk premium, so that the global firms will have to pay lower cost of debt capital.
This research chooses the listed companies which include 3048 observations from 2005 to 2009. Use ordered probit regression analysis to examine the impact of global operations on credit ratings and ordinary least squares regression analysis to examine the impact of global operations on cost of debt capital. And use the dummy variable whether the firm has set up overseas subsidiaries or not to measure global operations. The results are summarized as follows:
1.It is significantly negative association between global operations and credit rating. The global firms have greater quality of information and lower credit risk than the domestic firms. So, the credit rating agencies will grant better credit rating to the company.
2.It is significantly negative association between global operations and the cost of debt capital. The global firms have greater quality of information than the domestic firms. And the corporate fault risk afforded by creditor is more less, requested lower cost of debt capital from the global firms.
3.Further use research and development intensity to measure the degree of global operations. The results are summarized as follows:
(1)It is significantly negative association between the degree of global operations and credit rating. If the degree of global operations is higher, the credit risk will be lower. And the credit rating agencies will grant better credit rating to the company.
(2)It is significantly negative association between the degree of global operations and the cost of debt capital. If the degree of global operations is higher, the corporate fault risk afforded by creditor will be lower. And the creditor will request lower cost of debt capital from the firms.
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