Abstract: In recent years, the phenomenon of associated guarantee has become more and more frequent. As a financing mechanism, associated guarantee is to solve the information asymmetry problem of credit. Based on 2007-2016 data of A-share listed companies, this paper analyzes the influence of the company′s acceptance of associated guarantee on its cost of debt, and conducts an empirical test from two aspects of information risk and debt agency risk. Research shows that accepting associated guarantees can reduce the corporate cost of debt, the associated guarantee reduces the degree of accrual and real earnings management of the company and improves the quality of earnings;the reduction effect of associated guarantee on the cost of debt is more significant in firms that are not audited by the big four accounting firms and that in lower marketization degree. The above conclusions show that the associated guarantee can reduce the cost of debt by reducing corporate information risk and debt agency risk, and the reduction of the cost of debt is more significant in companies that in financial distress.

Key words: associated guarantee, information risk, debt agency risk, cost of debt