Corporate Governance Score and Debt Mix in Korean Stock Market
Authors:   Asia-Europe Perspective Association, Park KyungIn , YI Ka-Youn 
Published: June 2018

Companies in South Korea of the securities market, you can use a financial institution debt, by issuing the debt, it can be to raise external capital others.
In the existing research, companies that more and more use of loans from financial institutions was that the information asymmetry has the characteristics of high enterprise.
For example, the scale of the company, If you look at the company characteristics such as research and development expenses intensity, was to be able to know the evaluation of financial institutions debt.
We extract our data using KIS-Value supplied by Korea Information Service(KIS) and KCGS(Korea Corporate Governance Score) by KCGS Center. The sample of our paper consist of 3,514 Korean non-financing companies listed on Korean Stock Exchange(KSE) from the period of 2007 to 2013.
Analysis results are summarized as follows.
First, during that period, the ratio of loans from financial institutions was not higher than the proportion of corporate bonds.
Second, the corporate governance score is high companies can be seen that there is a high awareness of the company, it has been shown to be lower financial institutions borrowing ratio. This bank loans ratio rather evaluating corporate governance is lower companies have been shown to be higher, these companies due asymmetric information, rather than a direct financing to more leverage indirect financial It has supported it.
Thirdly, it has been expected to be corporate governance score improve higher proportion of financial institutions debt further reduced, unlike these expectations, it was found that is not affected. In other words, more is influenced in accordance with the variation of the corporate governance score, since presumably it may be determined that recognition by receiving the existing corporate governance score, and the influence on the ratio of financial institutions loans it is possible to receive.
Fourth, as the company size is large, and the higher the percentage of research and development costs, the ratio of tangible assets is high, it has been shown that a higher proportion of companies as loans from financial institutions that can be pledged as collateral. Existing already high debt ratio firms, in order to avoid a loan from the bank, it has been shown that the lower the ratio of financial institutions debt.
Limit point with this study is as follows.
First, on the restriction of research materials, it was not able to collect in detail the part for the new financing. Only I was using the data that can be collected is accounting books published through the past debt outstanding and debt balances. If it is possible to accurately grasp the information of issuance of bonds and bank loans at the time of new funding in the years, it will be able to better analyze.
Second, if there is the score or index available to the other have been utilizing corporate governance scores as an indicator of the visibility in the capital markets, it is also necessary to try to this further use.
However, despite this limit point, in this study, in accordance with the recognition of the information asymmetric capital market, it is confirmed useful study that bank loans ratio changes.
In particular, for a company in direct financing and indirect financing of the market is divided into the capital market and the financial markets to take advantage of the direct financing market, the number that can be shown by frequently induce the soundness and transparency of the capital market information, must be maintained and utilized by many producers.