Audit Committee Chair’s Geographic Distance and Cost of Equity Capital

Using a sample of A-share listed companies in China for the period of 2007-2018, this paper empirically tests the impact of the geographical distance of the audit committee chair (ACC) on the company’s cost of equity capital. The study found that there is a significant positive correlation between the geographical distance of ACC and the company’s cost of equity capital, and the regulatory strength will weaken the positive relationship between the two. This conclusion still holds after a series of robustness tests. The research conclusion of this paper not only enriches the research on the characteristics of audit committee chairs, expands the research extension of geographical economics in the field of financial accounting, but also provides certain theoretical support and test evidence for listed companies to select ACC and reduce the cost of equity capital. It is of great significance to improve the performance level of the audit committee and protect the interests of investors.