Can High-Quality Interactions Lower the Cost of Debt? Insights from Interactive Investor Platforms

•We explore the impact of high-quality interactions on IIPs on the cost of debt.•We find the moderating effects of information reliance, external monitoring and characteristics of board secretary.•Firms with high-quality interactions are also associated with longer-term loans and favorable bond covenants. With the data from online interactive investor platforms in China, we find that high-quality interactions between investors and listed companies lead to a reduction in the cost of debt. This effect is more pronounced in firms relying heavily on information, having weaker external monitoring, and boasting a more sophisticated board secretary. Furthermore, our findings indicate that high-quality interactions are also associated with longer-term loans and favorable bond covenants. Our findings have significant implications for improving the information environment of capital markets by highlighting the value of fostering transparent and effective communication channels between investors and firms.