Study Of Capital Structure Of Chinese Listed Companies

The theory of corporate capital structure is the core of modern finance theory. It's involved with the firm's finance goal, ways of financing, cash flow and other important financial issues, and also with corporate governance, and incentive structure. The theory of capital structure also is the important component of mordern finance and corporate theory.From the beginning of 1950s' capital structure hypothesis to the birth of the MM theory, it experienced the dispute which lasted for a long time. The west financial researchers constantly made meaningful studies on capital structure. They have discussed the relaxation of MM theory's strict assumptions since its establishment in 1958, and their efforts make more and more practical sense and constitute the innovation of theory in different level, such as agency cost model, interest conflict between shareholder and manager, interest conflict between shareholder and creditor, asymmetric information model, the mutual effect between product market and factor market, the theory on the corporate control , etc. In 1990's, with the emergence of behaviour financial theory , more and more financial researchs do their research on capital structure in behaviour finance method.Chinese stock exchange market is a emerging market, and it's set up on the time of economic transition. So, he operation and the rule environment of China's listed companies is different from the companies of developed countries. This paper tried to take advantage of the newest results of western researchers on capital structure to investigate and prove the adaptability of them in Chinese emerging market.To begin with the basic characters of capital structure of Chinese listed firms, this paper tried to investigate the capital structure decision, the relation between capital structure and competition of product market, and market timing behavior in Chinese stock market.There are seven chapters in this dissertation, and the contents of every chapter is:The first chapter is introduction.The second chapter summarizes the theories of corporate capital structure and makes comments on them.The 3th chapter does empirical study on capital structure decisions of Chinese listed firms.After analysis of literatures,the paper select 33 index variables as dependent variables which may affect the capital strucutre. By factor analysis and stepwise regression, the paper concludes the main determinant factors and their effect to capital structure. At the end of paper, Robust tests are done with different measuresof leverage, different samples,and different econometric methodologies, the results reveal the conclusion is robust. Then, we took advantage of a dynamic adjustment model and dynamic panel methodology to investigate the capital structure of Chinese listed firms. Compared with static model,we found the evidence on existence of partial adjustment.Moreover,this paper also analyzed the effects of different firm-specific characterics as well as macroeconomic factors on the speed of adjustment to target capital structure.The 4^th chapter examines the relation between growth opportunity ,capital structure and dividend policy, by using financial data of Chinese listed firms to contruct panel data. And Using a panel data of Chinese listed companies,this chapter examined whether financing considerations measured by the capital structure affect corporate investment decisions unducing underinvestment or overinvestment incentives according to agency theoryThe 5^th chapter applies parametric and non-parametric test, and descriptive statics to systematically study the relation between industry characteristic and capital structure, and establishs the empirical link between corporate capital structure and product market competition. We choose some indexs which were frequently used in the past studies to measure market competition . By common factor analysis, we construct some factors to represent different faces of market competition. Finally, we take advantage of panel data model to do regression.The 7^th chapter reviews the development of behaviour finance to corporate capital structure theory. Then uses the financial data of listed company in Shanghai and Shenzhen stock markets from 1990 to 2004 to attempt to investigate the suitability of this new theory in China. The econometric evidence shows that the Chinese listed companies really behave according to the pattern of market timing in the form of stock and debt financing; equity financing does significantly influence the capital structure of the Chinese listed companies ; the market timing behavior of stock financing does have persistent influence on the capital structureThe 7^th chapter is conclusion..