Solutions to Difficult and Expensive Bond Financing for Private Enterprises Based on an Empirical Analysis on Influencing Factors of Corporate Bond Financing Cost

Abstract

In this paper, an empirical analysis is made on the financing difficulties and strategies for private enterprises in China by using the data of listed companies from the perspective of influencing factors and mechanisms of bond financing in order to solve the problems of difficult and expensive financing for private enterprises. It is found that the credit level and leverage are significantly positively related to the financing cost of corporate bonds, while the company size is significantly negatively related to the financing cost of corporate bonds; large companies are more concerned by the public than small companies, with relatively low information asymmetry of bond financing and relatively strong solvency because of strong capital strength; and return on equity has no significant impact on the financing cost of corporate bonds. Therefore, private enterprises should continuously improve their intangible values such as brand, strength and credit, and achieve lower debt financing costs by using diversified financing tools to reduce the level of financial leverage, and designing terms for resale, so as to promote the development of enterprises.