Internal Corporate Governance Mechanism and Credit Spreads: Evidence for the Bond Market in China

: With the incidents of corporate bond defaults continually emerging, the role of internal corporate governance in bond market has received more attention. In the research, 3265 corporate bonds issued by A-share listed companies in China from 2011 to 2020 are as research object and the dynamic panel one-step system Generalized Method of Moments is adopted to estimate the impact of four types of internal corporate governance mechanism on the credit spreads of corporate bonds. Regarding ownership structure, ownership concentration and state-owned enterprises have significantly negative relationship with credit spreads of corporate bonds. Concerning board governance, board size and CEO duality have significantly positive relationship with credit spreads, but the percentage of independent directors has opposite situation. Executive monetary compensation and information disclosure quality are significantly negative associated with bond credit spreads. The findings not only enrich the economic consequences of internal corporate governance mechanism and the factors affecting the cost of bond financing, but also provide implications for investors, firms and regulators in bond market and promote sustainable development of bond markets in China.