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Institutional investors' debt-related attention and the cost of debt: Evidence from site visit Q&As

Author

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  • Gao, Kaijuan
  • Deng, Shiying
  • Zhu, Xinyu
  • Chan, Kam C.

Abstract

Institutional investors' debt-related questions during Q&A sessions in site visits (IISVDs) could mitigate information asymmetry and strengthen monitoring, thereby alleviating creditors' concerns, but they may also exacerbate Type II agency conflicts between shareholders and creditors. Using a sample of Chinese firms listed on the SZSE from 2012 to 2023, we find that IISVDs have a net positive effect on firms in terms of lowering their cost of debt. The results are robust to a battery of checks. Further analyses show that the effect is more pronounced for firms operating in a poorer information environment or exhibiting weaker governance, consistent with the information and governance effects of IISVDs. By contrast, when institutional investors are already shareholders of the visited firm, the effect of IISVDs is weaker due to severe Type II agency problems between shareholders and creditors.

Suggested Citation

  • Gao, Kaijuan & Deng, Shiying & Zhu, Xinyu & Chan, Kam C., 2026. "Institutional investors' debt-related attention and the cost of debt: Evidence from site visit Q&As," Pacific-Basin Finance Journal, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:pacfin:v:97:y:2026:i:c:s0927538x26000624
    DOI: 10.1016/j.pacfin.2026.103116
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