Corporate governance and the cost of public debt financing: Evidence from Japan |
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| Affiliation: | 1. Department of Quantitative Finance, National Tsing Hua University, Taiwan;2. Department of Finance, National Sun Yat-sen University, 70 Lianhai Rd., Kaohsiung, 804, Taiwan.;1. Imperial College London, UK;2. CEPR, UK;3. NBER, USA;4. The University of Tokyo, Japan;5. TCER, Japan;6. Stanford University, USA;7. Waseda University, Japan |
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| Abstract: | This paper explores the relationship between corporate governance mechanisms and the cost of public debt financing in Japan. Using a sample of corporate bonds newly issued in Japan during the period 2005–2008, I find that CEO ownership is associated with higher yield spreads after controlling for other governance, bond, and firm characteristics. Founding family ownership is also positively related to yield spreads. In contrast, firms with large corporate shareholders enjoy lower yield spreads. These results are robust to various alternative specifications. Overall, my results indicate the importance of corporate governance mechanisms in Japanese corporate bond markets. |
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| Keywords: | Yield spreads Ownership structure Corporate governance |
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