Corporate Disclosure Quality and Debt Cost

This paper studies the relationship between corporate disclosure quality and the debt cost of Chinese listed companies with A-share companies listed in Shengzhen Stock Exchange.We use credit ratings as the proxy of debt cost and the response variable and,use disclosure quality ratings as the proxy of disclosure quality and the independent variables.After controlling such factors as leverage,size,profitability,industry,we find a significant negative relationship between debt cost and disclosure quality among these samples.That is,the higher the disclosure quality,the lower the debt cost.In addition,the more relative importance of disclosures,the more market uncertainty.