The Research of the Relationship between business group affiliation, Enterprise’s Ownership Structure, and Cost of Debt

• Main Authors: Tsai,Cheng-Hung, 蔡承宏
• Other Authors: Sheng-Yung Yang
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/14507881916006862555

碩士 === 國立中興大學 === 財務金融學系所 === 102 === This thesis mainly tries to examine the relation between business group affiliation and the cost of debt capital. In a large body of literature, they usually use company bonds as their samples, but in this thesis it uses companies’ lending records as samples. Moreover, based on domestic related literature, it uses lots of factors, including cross-ownership and ownership structure et al. In additional, this thesis is referred to Hutton et al.（2009）for calculating a company’s transparency of the information, it is different to the method in literature. In literature, they always use the information published in Taiwan security and futures institute to define a company’s transparency of the information. Besides, this thesis is referred to Byun et al ( 2013 ) for examining whether the co-insurance effect could affect a company’s cost of debt financing, using a sample of lending records between banks and companies listed in Taiwan TSE and OTC from 2008 to 2012. In the results, they almost are consistent with the co-insurance explanation, indicating in Taiwan a company belonging to a business group can get a lower cost of debt. Additionally, when a company belongs to a business group, a bank considers the company’s uncertainty about the future payoffs of debt holders and pledgeable income; the co-insurance effect does not have a fixed effect. However, when a bank considers a company’s ownership structure to a company belonging to a business group, it has the same outcome like Liou (2007) indicating if a company’s final controller has more stakes, it will increase the cost of debt. It has the same effect to the cost of borrowing when a final controller has a wider divergence between control and ownership.