CORPORATE GOVERNANCE AND COST OF DEBT AN EMPIRICAL STUDY OF FERMS LISTED IN THE STOCK EXCHANCE OF THAILAND, SET100 INDEX

Abstract

This study investigates the relationship between good corporate governance and the cost of debt among listed companies in the SET100 group on the Stock Exchange of Thailand during 2017-2024, based on 660 firm-year observations over eight years using secondary data from annual reports and Form 56-1 filings. Employing descriptive statistics, correlation analysis, multiple regression, and hypothesis testing, the research examines the influence of governance mechanisms on debt financing. The findings reveal that the proportion of common shares held by major shareholders has a positive effect on the cost of debt, while directors’ shareholdings are significantly negatively associated with it. In contrast, board size, proportion of independent directors, auditor reputation, and corporate governance scores show no significant relationship. Furthermore, the control variables is interest coverage ratio and firm size are found to have a significant negative association with debt costs, indicating that financially stable and larger firms are more likely to reduce borrowing costs, strengthen creditor and investor confidence and obtain financing at lower interest rates.