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<p>Poverty has always been a common problem faced by all mankind. This paper empirically investigates the impact of corporate involvement in precision poverty reduction on corporate debt funding cost and intrinsic mechanism of action using the Tobit model with a A-share companies in China’s Shanghai and Shenzhen stock markets from 2016 to 2023. The findings exhibit that precision poverty reduction has a decreasing effect on corporate debt funding costs, in which the enhancement of firm accounting information quality, the enhancement of firm social reputation and the reduction of firm business risks after taking party in precision poverty reduction play part of the mediating role. Heterogeneity tests found that the decrease impact of precision poverty reduction on debt financing costs was more pronounced among non-s<Emphasis Type="Underline">t</Emphasis>ate enterprises, CEO enterprises with non-financial backgrounds, companies in industries with a low degree of competition, and companies with a low degree of marketization. Further research also discovers that the spillover influence of precision poverty reduction on firm performance can be transmitted through the expense of debt funding. Enterprises should actively participate in precision poverty reduction. The findings enrich related study on the economic effects of precision poverty reduction by firms and provide empirical evidence for optimizing the allocation of poverty alleviation resources.</p>

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Can participating in targeted poverty alleviation reduce the cost of corporate debt financing?—evidence from China

  • 期刊论文

  • 发表日期：

    2025年5月23日

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  • Junling Yi,
  • Jinglin Li

摘要

Poverty has always been a common problem faced by all mankind. This paper empirically investigates the impact of corporate involvement in precision poverty reduction on corporate debt funding cost and intrinsic mechanism of action using the Tobit model with a A-share companies in China’s Shanghai and Shenzhen stock markets from 2016 to 2023. The findings exhibit that precision poverty reduction has a decreasing effect on corporate debt funding costs, in which the enhancement of firm accounting information quality, the enhancement of firm social reputation and the reduction of firm business risks after taking party in precision poverty reduction play part of the mediating role. Heterogeneity tests found that the decrease impact of precision poverty reduction on debt financing costs was more pronounced among non-state enterprises, CEO enterprises with non-financial backgrounds, companies in industries with a low degree of competition, and companies with a low degree of marketization. Further research also discovers that the spillover influence of precision poverty reduction on firm performance can be transmitted through the expense of debt funding. Enterprises should actively participate in precision poverty reduction. The findings enrich related study on the economic effects of precision poverty reduction by firms and provide empirical evidence for optimizing the allocation of poverty alleviation resources.