Capital Structure: Theories, Model, And Empirical Analysis Of China's Listed Companies

The dissertation is composed of three parts, which are theories of capital structure, models and case studies. The objective is to find a solution for the following two major issues such as 1) what are the major influential factors for capital structure of enterprises? 2) What determine the capital structure of listed companies in China and what are the features for those factors?The existing theories of capital structure have explored the perplexed problems from different angles such as taxations, agent costs, unbalanced information, correlatives between product and marketing, control interest of company, etc. All these theories indicate that there are lots of potential determinants to capital structure. However, we do not have an integrated framework that can synthesize all these theories up till now.On the basis of current theories, we designed a capital structure model combined with agent cost and information cost. We tried to probe into relationships between the effects on quantities and durations of liabilities and the effects on optimum risk strategies caused by ageing cost, information cost and some other variables. We found that operation risks and bankrupt costs of enterprises could have positive impacts on leverage ratio, while pay-out ratio of dividends may have negative impact on leverage ratio.In accordance with some case studies performed on listed companies in China, we noted that leverage ratios of listed companies in China are far below that of listed companies in developed countries and some developing countries and the ratios of long-term liabilities are exceptionally low. Compared with other countries, companies in China prefer to have stock investment. Meanwhile, ownership structure, degree of economical and industrial development can also have great impact on capital structure of enterprises. The results we obtained from regress ional analysis on determinants of listed companies' leverage ratios are consistent with other existing theories. In addition, factors verified in our model have all been well-proved in other case studies.We think it will be the most fundamental reform of our China's capital market to re-orient the function of our capital market. Stock market should be transformed from acting as the financing tool of some targeted enterprises to be a social scheme for optimizing financial resources. On the other hand, due to that China's bond market is still in the early development stage, it will contribute a lot to China's enterprises and capital market to expedite the development of bond market.