Study On Optimization Of Capital Structure Of Listed Agribusinesses

The listed agribusineses form a special group in our listed companies. In the securities market, neither their number nor the total amount of assets nor the scale of capital stock, the share of listed agribusineses is more than 5%. However, just as we cannot deny the fundamental status of agriculture only because of its dropping proportion in GDP with the acceleration of the industrialization process, we should not neglect the effect and influence of listed agribusineses. As an industry with distinct characteristics in the securities market, the effect of listed agribusineses upon the securities market and even the development of national economy cannot be underestimated.In the developing process of listed agribusineses, a realistic and unavoidable problem is the unreasonable capital structure, which manifests itself as low asset-liability ratio, serious binary structure of share-ownership and high proportion of current liability and so on. The unreasonable capital structure exerts profound influence on the governance structure and even determines the behavioral characteristics and the performance of the companies. Therefore, it is urgent to solve the problem of how to optimize the capital structure of listed agribusineses which hinders their development.Focusing on the analysis of how to optimize the capital structure of our listed agribusineses, this dissertation includes three parts. The first part, including chapter II and ni, analyzes the basis of capital structure optimization of listed agribusineses. This part aims at making theoretical preparation for the research on the theories of capital structure optimization of our listed agribusineses and clarifying its realistic basis. The second part, including chapter IV, V and VI, studies the listed agribusineses' behavior of selecting financial policies and the optimization of capital structure in the capital flow. The companies' capital structure is a process of dynamic adjustment and formation. The selection of various financial policies and their formation in the companies' producing and operating process is affected and restricted by present capital structure and depends on it for decision-making. On the other hand, the implementation and results of every financial policy changes present capital structure from different aspects to different degrees. Chapter IV carries out positive analysis on the factors determining the capital structure of listed agribusineses by using the cross-sectional data of the year 2003. Chapter V specifically analyzes the effect of financing behavior of listed agribusineses on the capital structure and the maximization of company value. From the perspective of dividend policy, chapter VI analyzes its effect on capital structure, arguing that the harmonious cooperation among optimization of dividend policies, reasonable dividend paying ratio, dividend paying modes and strategies is propitious to the optimization of capital structure. The third part, including chapter â…¦ and â…§, puts forward countermeasures for the optimization of capital structure. In chapter â…¥, the author proposes countermeasures for optimizing the internal governance structure of listed agribusineses in order to establish the micro-institutional basis for the optimization of capital structure. From views of the reform of the administrative system of state-owned assets, the cultivation and perfectness of capital market and the construction of social credit system, Chapter â…§ respectively puts forward measures of optimizing the external institutional environment for the optimization of capital structure of listed agribusineses which is influenced and determined by macro-economic system, market institutionalenvironment and social cultural system. These two chapters shape the complete countermeasures for the optimization of capital structure of listed agribusineses both from micro- and macro- perspectives and that of the construction of the companies' internal and external institutional environment.After the complete, systematic and profound analysis, the dissertation draws following conclusions.Firstly, there are several problems existing in present capital structure of listed agribusineses, such as the low asset-liability ratio, unreasonable liability structure and high proportion of current liability and so on. Through expanding the proportion of liability financing, the market value of listed agribusineses can be increased.Secondly, like other listed companies, listed agribusineses also strongly prefer share-ownership financing. And the source of its long-term capital mainly depends upon the external share-ownership financing and then short-term debts are obtained through financing organization and commercial credit. The capital obtained through bond market is limited and the proportion of internal financing is rather low, which deviates from the theory of optimal sequential financing. This phenomenon results from the fact that under the binary ownership structurethe private proceeds of internal administrators and the special proceeds of major share-holders all can be realized through share-ownership financing.Thirdly, the results from the selection of capital structure of our listed agribusineses are consistent with the interests of holding share-holders and the "inner men" who actually controls the companies instead of the maximization of companies' market value. The approach to change such an unreasonable behavior is to optimize the ownership structureand liability structure of listed agribusineses and establish optimal internal governance structure, so as to turn the goal of selecting the capital structure back to the maximization of the companies' market value.Fourthly, the optimization of capital structure of listed agribusineses is concerned not only with the financial decision-making of how to adjust the shareholders' interest and the liability structure and its proportion, but also with the harmonization of macro-interests which are closely related with present macro-economic institution, market environment and system and social and cultural systems. It is necessary to combine the optimization of companies' internal organizational institutions and financial decision-making behavior with that of the external environment and system in order to obtain the optimization of capital structure of listed agribusineses.