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Study On Determinants Of Financial Structure Of Listed Agribusinesses

Posted on:2004-07-06Degree:DoctorType:Dissertation
Country:ChinaCandidate:Q YaoFull Text:PDF
GTID:1116360095460784Subject:Agricultural Economics and Management
Abstract/Summary:PDF Full Text Request
The dissertation analyzes determinants of financial structure of listed agribusinesses in China by using the empirical methodology, and provides the empirical evidences of theories of financial structure and traits of Chinese listed agribusinesses. The influence of the micro-factors and macro-circumstance is tested. In addition it shows reasons from tax, bankruptcy risk, agency cost and asymmetric information perspectives.Chapter one, which is the background of theoretical and empirical study, describes preliminary characteristics of the Chinese listed agribusinesses, including the development, and regional and industrial distribution, and the relationships between macro-circumstance and it, such as the Chinese agriculture, security market and WTO.Chapter two and the following chapters systematically study determinants of financial structure. Based on the MM theory, trade off theory, incentive-based theory and asymmetric information-based theory, micro-factors and macro-circumstance, probably influencing financial structure, are put forward. The former includes none-debt tax shield, profitability, asset tangibility, growth, size, business risk, et al. and the latter, tax institution, ownership structure, financial institutions et al. Then in methodology, sample, measurements of variables and methods are defined in order to examine hypothesis above. Pror example, several indicators are used to measure a variable, and stepwise regression, cluster analysis and correlation analysis compose empirical methods.Statistical description shows capital resource of listed agribusinesses: external capital is mainly obtained by access to stock market, next the financial institutions and commercial credit, and little by bond market. The empirical results indicate that, in the aspect of micro-factors, business risk, asset tangibility and size are the most important factors. Growth, profitability and industry are in the second place. The estimate of none-debt tax shield measured by depreciation of fixed asset is insignificant. In the aspect of macro-circumstance, tax institution, ownership structure, stock market and economic growth have significant effects on the agribusinesses financing decision, but bank, bond market, interest and inflation insignificant.Furthermore, the reasons why determinants above affect the financial structure in the way are deeply analyzed, and empirical evidences of theories of financial structure and traits of Chinese listed agribusinesses are concluded by comparing with other countries or other listed companies. These results are consistent with opinions of tax, bankruptcy,agency and asymmetric information: if the tax credit would decrease the marginal tax rate or effective tax rate, managers will keep lower debt level; ratio of intangible asset is negatively related to debt level and size positively to debt level; free cash flow, ownership concentration, managerial ownership, ratio of fixed asset and growth measured by change ratio of total asset affect significantly financial structure; profitability and growth measured by Tobin Q signal the inside information of firms. Three traits are following: first, the firms facing the tax exhaustion are still increase the debt ratio, especially short debt, for the continuous or expanded operation. Second, without bankruptcy mechanism, firms with high business risk depend on debt to keep continuously operating. Third, ownership concentration signals the inside information.The enlightenment is drawn from the conclusions. Government support for the listed agribusinesses, especially tax credit, should be correctly treated. Government should provide different tax credits and firms should make good use of leverage effect to increase the firms' value. Next bankruptcy mechanism must be established. New bankruptcy law must define the standard of claim of bankruptcy and prevent firms to escape from debt; costs of bankruptcy procedure should be controlled; government should not intervene. Security market should be developed. As for the stock market,...
Keywords/Search Tags:Listed agribusiness, Financial structure, Micro-factors, Tax institution, Ownership structure, Financial institutions
PDF Full Text Request
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