Research On The Influencing Factors Of Leverage Ratio Of Steel Industry Listed Companies In China

After the financial crisis in 2008,China put forward the four trillion yuan stimulus plan,the leverage ratio of various departments has been climbing,especially the steel industry which has been a situation of overcapacity and high leverage ratio,the steel industry listed companies have suffered serious losses and faced a debt crisis.As an important supporting industry in the real economy,the healthy development of China’s steel industries provides strong support and guarantee for the development of related industries.In this situation,China put forward a target of reducing capacity and deleveraging to steel industry.Based on this background,this paper studies the leverage ratio of China’s steel industry.In view of the availability of data,the research chooses the listed companies in China’s steel industry as the object in this paper,we want to explore the influencing factors of the leverage ratio of listed companies in China’s steel industry,understands the real reasons for the high leverage ratio,and provide more path options to steel industry about de-leverage and enhance the value of company.After systematically reviewing the existing capital structure theory which is the basic theoretical basis of research on leverage ratio,this paper makes a simple analysis of the current situation of the leverage ratio of steel industry listed companies.In the empirical part,this paper chooses the data from 2011 to 2017 of 37 steel industry listed companies,using company’s leverage ratio(liability to asset)as explained variable,and eight micro-level factors including the profitability,company growth,asset collateral value,solvency,non-debt tax shields,company size,agency cost and equity structure,as well as three macro factors including the growth rate of GDP and inflation rate and loan interest rate to be the explanatory variables.After F test,LM test and Hausman test,the fixed effect model was selected for regression analysis,considering the effects of the microcosmic influencing factors on the company’s leverage ratio,the direct and indirect effects of macro influencing factors to the leverage ratio of company,and the following conclusions were drawn: profitability,business growth,asset collateral value,solvency,non-debt tax shields,company size,agency costs have significant influences on China’s steel industry listed companies leverage;equity structure has no significant influence on the leverage ratio of listed companies in China’s steel industry;GDP growth rate and loan interest rate will have a direct impact on the leverage ratio of listed steel companies in China.The three macro explanations have impacts on some micro factors,thus indirectly affecting the corporate leverage ratio.Based on the above empirical analysis,this paper puts forward the following policy suggestions to reduce the leverage ratio of steel industry listed companies in China and improve the corporate’s debt structure: first of all,to eliminate the backward production capacity of steel industry listed companies in China;Second,to reasonable use the guarantee value of steel industry listed companies in China;Third,we should to promote the merger and reorganization of China’s steel industry;Finally,to broaden ways of financing of steel industry listed companies in China.The innovation of this paper is that it fully considers the impact of macro factors on the leverage ratio of listed steel companies in China,and the research topic fits the current background of "deleveraging".