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Has shareholder background been priced?–Evidence from the issuance of financial bonds by financial leasing companies

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Listed:
  • Chen, Xia
  • Wang, Lili
  • Zhu, Yinghuan
  • Shang, Yue

Abstract

This paper analyzes the influence of sponsors and major shareholders on the financing costs of financial leasing companies. Based on the natural experiment of financial leasing companies issuing financial bonds, we find that the financing cost of financial leasing companies controlled by non-banks is significantly higher than that controlled by banks, and the cost of financing for financial leasing companies is generally cheap when the largest shareholder is larger and more profitable. Further, the financing cost of the financial leasing companies controlled by banks is mainly affected by its factors, while the other is significantly affected by the basic characteristics of major shareholders.

Suggested Citation

  • Chen, Xia & Wang, Lili & Zhu, Yinghuan & Shang, Yue, 2023. "Has shareholder background been priced?–Evidence from the issuance of financial bonds by financial leasing companies," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005275
    DOI: 10.1016/j.frl.2023.104155
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    References listed on IDEAS

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    1. Jeffery (Jinfan) Chang & Ting Yang & Yanping Shi, 2022. "Finance Leases: In the Shadow of Banks [Entrusted loans: a close look at China’s shadow banking system]," Review of Finance, European Finance Association, vol. 26(3), pages 721-749.
    2. Xu, Guoquan & Lu, Nuotian & Tong, Yan, 2022. "Greenwashing and credit spread: Evidence from the Chinese green bond market," Finance Research Letters, Elsevier, vol. 48(C).
    3. Alberto Alesina & Paola Giuliano, 2015. "Culture and Institutions," Journal of Economic Literature, American Economic Association, vol. 53(4), pages 898-944, December.
    4. Merton, Robert C, 1974. "On the Pricing of Corporate Debt: The Risk Structure of Interest Rates," Journal of Finance, American Finance Association, vol. 29(2), pages 449-470, May.
    5. Steen Thomsen & Torben Pedersen, 2000. "Ownership structure and economic performance in the largest european companies," Strategic Management Journal, Wiley Blackwell, vol. 21(6), pages 689-705, June.
    6. Renu Arora, 2021. "Driving excellence in credit risk management practices in commercial lending - an empirical analysis of Indian public sector banks," International Journal of Business Continuity and Risk Management, Inderscience Enterprises Ltd, vol. 11(1), pages 1-24.
    7. Coral Ingley & Jens Mueller & Graeme Cocks, 2011. "The financial crisis, investor activists and corporate strategy: will this mean shareholders in the boardroom?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 15(4), pages 557-587, November.
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    Cited by:

    1. Jia, Haibo & Xue, Jun, 2024. "Relationship between administrative punishment and corporate debt financing," Finance Research Letters, Elsevier, vol. 64(C).

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    More about this item

    Keywords

    Financial leasing; Financial bonds; Shareholder background; Credit spreads; Excess cost;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects

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