Dynamic Adjustment Of Corporate Capital Structure Based On External Financing Environment

Capital structure is one of the core issues of corporate finance. Capital structure research has been shifted from static analysis to dynamic analysis: on the one hand the theory research of capital structure has been developing from static capital structure theory into dynamic capital structure theory. On the other hand, the empirical research on capital structure has been developing from the study of the static determinants of capital structure into the study of capital structure dynamic adjustment. Meanwhile, the factors study that influencing capital structure are also extending from the company level to the macro environment level. Based on this background, this paper studies the effects of external financing environment on capital structure dynamic adjustment.In this paper, external financing environment contains macroeconomic factors and institutional factors. Macroeconomic factors are divided into business cycle, financing market conditions and macroeconomic policy. Institutional factors are divided into legal environment, tax environment, the marketization process and the enterprise property rights.This paper analyzes the effects of macroeconomic factors on capital structure adjustment speed of Chinese listed companies. The empirical study results indicate that business cycle, financing market conditions and changes in the macroeconomic policy have positive influences on Chinese listed companies’ capital structure adjustment speed.This paper analyzes the effects of institutional factors on capital structure adjustment speed of Chinese listed companies. The empirical study results indicate that the legal environment, tax environment, the marketization process have positive influences on the adjustment speed of corporate capital structure. Meanwhile, the adjustment speed of non-state-owned listed companies’ capital structure is higher than state-owned listed companies’.This paper analyzes the effects of external financing environment on Chinese listed companies’ capital structure adjustment path. The empirical study results indicate that macroeconomic factors and institutional factors can affect the companies’ financing decisions to some extent.At last, the research conclusions are summed up meanwhile relevant policy suggestions are proposed.