Abstract Based on the date of Shanghai and Shenzhen A-share listed firms in China from 2008 to 2019, this paper examines the impact of vertical interlocks of executives on enterprise debt financing from the perspectives of “supervisory effect” and “tunneling effect”. The study finds that when there are vertical interlocks of executives in listed companies, the cost of enterprise’s debt financing is higher, the debt financing period is shorter, and this effect is more significant in non-state-owned enterprises. The paper also finds that the vertical interlocks of executives play a “tunneling effect” through capital occupation. Through further research, this paper indicates that the stronger the concurrently position is, the weaker the controlling power of major shareholders is, and the more significant the “tunneling effect” of vertical interlocks of executives is. Moreover, compared with the vertical concurrent tenure of the general manager, the vertical interlocks of the chairman have a more significant the impact on enterprises debt financing. This paper can enrich the research on the corporate governance effects of the vertical interlocks of executives and is a useful supplement to its economic consequences.
2021, Vol. 38 
