A Study Of Capital Structure Of China's Listed Company Major: Political Economics

Based on the process of economic reform, the operation and the rule environment of China's listed companies is different to the companies of developed countries, this paper applies theories of west capital structure, research and confirm the suitability of the theories in China. The study start from capital structure and its basic characteristic of China's listed companies, research the influence to corporate governance, corporate control and the development of capital market.By the review of the capital structure of China's listed companies and state-owned enterprises, there is great difference between them. This paper dose empirical study to the capital structure of listed companies by vast amount of statistics date, compared with the state-owned enterprises, at the same time do an international comparison with the companies of developed country, the empirical result shows the exist of equity financing preference. As the basic characteristic of the China's listed companies, equity-financing preference tend to six non-coordination phenomenon. This paper analysis the reason in the level of cost and rules, build a model to test the financing cost of capital of listed companies, compare of the cost of equity financing and debt financing directly, prove the cost of equity financing is lower than debt financing in current period. Because equity financing should be improving the capital structure of China's listed companies, equity financing is the first choice to the listed companies, another reason of the choice is the risk aversion of the manager to the hard constrained control of debt financing, but the soft constrained control of equity financing, hence the intensity of the equity financing.Further, this paper continue to research the relationship of capital structure and corporate governance of listed companies, confirm that equity financing preference of China's listed companies tend to less efficiency, as a example-unfair relevant business show and confirm the less efficiency of corporate governance of China's listed companies. This paper analysis the relationship of China's listed company's ownership structure and market for control; analysis the affect to efficient market by equity financing preference, confirm that China securities market has structure shortage for in-balance of stock market and bond market, and the internal structure shortage for in-balance of the stock market and bond market, the in-balance is outside reason for equity financing preference. Meanwhile equity-financing preference of China's listed company cause low efficient of capital usage, influence the efficient corporate governance of China's listed companies.Conclusions of this paper report equity financing preference is the basic characteristic of the listed companies. Financing behavior, financing pecking order of China's listed company are not followed to the west theories of capital structure. By another word, it is limited in suitability for the west theories of capital structure, its suitability should be affected by different environment arid background. The west theories of capital structure is not fitness to China current period, thus can not examination some economic phenomenon. Conclusions of this paper have stronger examination to the fact. This paper examined such as the problems of bond transfer to equity, the decrease and transform problems of state-owned stock.