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Do multiple large shareholders affect corporate bond yield spreads? Evidence from China

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  • Wang, Xin
  • Xie, Yan
  • Song, Di
  • Zhang, Weihua

Abstract

We investigate the impact of multiple large shareholders on corporate bond yield spreads. We find that the presence of multiple large shareholders lowers bond yield spreads. In cross-sectional analysis, we find that the impact of multiple large shareholders on bond yield spreads only exists in subsamples with severe agency costs, high default risk, and poor information asymmetry, indicating that multiple large shareholders (MLS) reduce corporate bond yield spreads by disciplining the expropriation of controlling shareholders and lowering information asymmetry. Overall, our findings document a positive economic consequence of multiple large shareholders from the perspective of debt financing costs.

Suggested Citation

  • Wang, Xin & Xie, Yan & Song, Di & Zhang, Weihua, 2022. "Do multiple large shareholders affect corporate bond yield spreads? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:pacfin:v:73:y:2022:i:c:s0927538x2200035x
    DOI: 10.1016/j.pacfin.2022.101740
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    2. Li, Xiaolong & Shi, Xue, 2024. "The role of large shareholder holdings in customer concentration and stock price volatility," Finance Research Letters, Elsevier, vol. 65(C).
    3. Li, WeiWei & Huang, Chia-Hsing, 2024. "Multiple large shareholders and asset-liability maturity mismatches," Finance Research Letters, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Multiple large shareholders; Expropriation; Information asymmetry; Monitoring; Collusion; Bond yield spreads;
    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
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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