Creditors' Governance,Political Connection and Agency Cost: A Study Based on Panel Data of Private Corporations

The essence of creditors' governance towards listed private corporations is the externality of debt contract between creditors and corporations.Political connection(PC),a crucial regulated variable,has been playing a significant part during the performance of creditors' governance.Having selected listed private corporations as our research sample,which contains high dependence upon government,this paper has analyzed regulation effect of political connections between creditors' governance and agency cost through setting up PC index system.The results have showed that current liabilities can restrain the increase of agency cost in private corporations,while fixed liabilities can boost agency cost.Political connections have worsened creditors' governance effect.PC regulates governance effect of current liabilities in a negative way,while regulates governance of fixed liabilities in a positive way.