Debt price premia and controlling shareholder tunnelling

Relative debt financing costs may contain information about internal resource allocation. This paper examines Chinese A-share firms from 2016 to 2025 using a leave-one-out premium relative to industry-year peers and a risk-adjusted premium net of observable fundamentals and industry-year conditions. Higher premia are associated with larger other-receivable balances, an accounting proxy for fund occupation. A one-standard-deviation increase in the risk-adjusted premium corresponds to an increase in other receivables equal to about 5.1% of the sample mean. The association remains in matched samples, alternative specifications, and models with industry-year and province-year fixed effects. Within-industry-year permutation tests place the observed coefficients in the upper tail of their reassignment distributions. The association is stronger among firms with persistent losses, persistent low growth, and severe financing constraints. Higher premia also accompany greater refinancing exposure and lower real investment.