Kurumsal Yönetim ve Denetim Kalitesinin Borçlanma Maliyeti Üzerindeki Etkisi: BIST Firmaları Üzerine Bir Araştırma
The Impact of Corporate Governance and Audit Quality on the Cost of Debt: A Study on BIST Firms

Summary/Abstract: The literature suggests that corporate governance mechanisms play a significant role in resolving firms’ challenges in accessing external financing sources and reducing the cost of debts. In this context, this study investigates whether corporate governance and audit quality have an impact on the cost of debt. Within this scope, the data of 190 companies listed on Borsa Istanbul (BIST) for the years 2008-2022 were analyzed by using panel data analysis and the Panel EGLS method. According to the analysis results, board independence, ownership concentration, and external audit quality reduce the cost of debt at a statistically significant level. In contrast, board size and audit committee independence have a statistically significant increasing effect on the cost of debt. Another significant finding of the study is that CEO duality and managerial ownership, which are often associated with unfavorable effects in the literature, to have a reducing and statistically significant effect on the cost of debt. The main contribution of this study is to reveal empirical findings on the extent to which corporate governance and auditing practices provide confidence to external financiers and influence their risk perception, and risk premiums in environment of macroeconomic instability. The results indicate that in countries where reliance on external financing is high, it would be a strategic step for firms to invest more in corporate governance reforms and auditing quality both in reducing cost of debt and building credibility in financial markets, thereby facilitating sustainable financing.

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