Cross-owners and bond issue pricing: coordination or collusion?
Using a sample of listed Chinese firms from 2007 to 2020, we investigate the governance implications of cross-ownership in corporate bond markets. We find that cross-ownership significantly reduces bond issuance spreads, suggesting that synergistic governance effects outweigh potential collusion ris...
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| Format: | Article |
| Language: | English |
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Elsevier
2025-06-01
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| Series: | China Journal of Accounting Research |
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| Online Access: | http://www.sciencedirect.com/science/article/pii/S1755309125000176 |
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| _version_ | 1850032807452082176 |
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| author | Shangkun Liang Sichao Wang Kaijuan Gao |
| author_facet | Shangkun Liang Sichao Wang Kaijuan Gao |
| author_sort | Shangkun Liang |
| collection | DOAJ |
| description | Using a sample of listed Chinese firms from 2007 to 2020, we investigate the governance implications of cross-ownership in corporate bond markets. We find that cross-ownership significantly reduces bond issuance spreads, suggesting that synergistic governance effects outweigh potential collusion risks. This effect operates through two channels: reducing information asymmetry between shareholders and creditors and lowering firm risk. The effect is stronger when cross-owners hold shares in more peer firms and retain shares longer but weaker for state-owned enterprises, long-term bonds and firms with robust information intermediaries. Our findings contribute to the corporate governance literature by demonstrating how cross-ownership enhances creditor protection, providing insights into optimizing ownership structures for debt financing, particularly in emerging markets with inadequate institutional monitoring. |
| format | Article |
| id | doaj-art-e7728ca4801543cca73454ce3bddd89d |
| institution | DOAJ |
| issn | 1755-3091 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Elsevier |
| record_format | Article |
| series | China Journal of Accounting Research |
| spelling | doaj-art-e7728ca4801543cca73454ce3bddd89d2025-08-20T02:58:30ZengElsevierChina Journal of Accounting Research1755-30912025-06-0118210042110.1016/j.cjar.2025.100421Cross-owners and bond issue pricing: coordination or collusion?Shangkun Liang0Sichao Wang1Kaijuan Gao2Central University of Finance and Economics, China; Corresponding author at: South Xueyuan Road 39, Haidian District, Beijing, China.Central University of Finance and Economics, ChinaHunan University, ChinaUsing a sample of listed Chinese firms from 2007 to 2020, we investigate the governance implications of cross-ownership in corporate bond markets. We find that cross-ownership significantly reduces bond issuance spreads, suggesting that synergistic governance effects outweigh potential collusion risks. This effect operates through two channels: reducing information asymmetry between shareholders and creditors and lowering firm risk. The effect is stronger when cross-owners hold shares in more peer firms and retain shares longer but weaker for state-owned enterprises, long-term bonds and firms with robust information intermediaries. Our findings contribute to the corporate governance literature by demonstrating how cross-ownership enhances creditor protection, providing insights into optimizing ownership structures for debt financing, particularly in emerging markets with inadequate institutional monitoring.http://www.sciencedirect.com/science/article/pii/S1755309125000176D42G12G32 |
| spellingShingle | Shangkun Liang Sichao Wang Kaijuan Gao Cross-owners and bond issue pricing: coordination or collusion? China Journal of Accounting Research D42 G12 G32 |
| title | Cross-owners and bond issue pricing: coordination or collusion? |
| title_full | Cross-owners and bond issue pricing: coordination or collusion? |
| title_fullStr | Cross-owners and bond issue pricing: coordination or collusion? |
| title_full_unstemmed | Cross-owners and bond issue pricing: coordination or collusion? |
| title_short | Cross-owners and bond issue pricing: coordination or collusion? |
| title_sort | cross owners and bond issue pricing coordination or collusion |
| topic | D42 G12 G32 |
| url | http://www.sciencedirect.com/science/article/pii/S1755309125000176 |
| work_keys_str_mv | AT shangkunliang crossownersandbondissuepricingcoordinationorcollusion AT sichaowang crossownersandbondissuepricingcoordinationorcollusion AT kaijuangao crossownersandbondissuepricingcoordinationorcollusion |