Bond Financing, Information Disclosure Quality and Corporate Investment Efficiency

The registration-based issuance system of enterprise bonds and corporate bonds has promoted the development of the bond market, and bond financing has become an increasingly important financing method for Chinese enterprises. Based on the analytical framework of ex-ante and in-event governance, and taking into account that the quality of information disclosure may be endogenous to the bond financing behavior, we have controlled the possible impact of the ex-ante governance effect of the new bond issue, focusing on the impact of bond financing during the duration of the bond. Bond financing enlarges the creditor supervision mechanism into the corporate stakeholder supervision mechanism by improving the quality of corporate information disclosure. We construct a mediation effect model based on the quality of information disclosure, and control the short-term impact of new bond issuance, and use sample data of listed companies in China for empirical analysis. Regarding the governance effect during the bond duration, the improvement of the quality of information disclosure can strengthen the role of bond financing in alleviating underinvestment, and has a mediation effect. On the other hand, it can alleviate the aggravating effect of bond financing on overinvestment, and there is a suppressing effect.