Corporate Capital Structure Theory: Based On The Balanced Ideological Perspective

The capital structure theory is a very complex question in the firm finance theory, and has been the important topic since long ago. Since MM theorem, the people have not stopped to explore the "puzzle of the capital structure". The modern capital structure theory research goal is to explain how the firms choose some specific capital structure, and bring out the advice of financing decision-making. The capital structure decision is the result of multi-factors; therefore synthesis of these factors to a unified model is a challenging work. In the many foundation work, two methods that based on the equilibrium thought have been paid much attention: One is from partial equilibrium to general equilibrium; the other is from the static equilibrium to dynamic equilibrium. This article is to launches the discussion from the balanced equilibrium angle to the capital structure theory.Based on the view of equilibrium thought, this article's basic logic frame and the main conclusion are:First, according to the clue of the capital structure theory evolution, briefly reviewed the main school and its viewpoint. Take the MM theorem as the demarcation line; the capital structure theory is divided into the traditional capital structure theory and the modern capital structure theory. By the use of the asymmetrical information application, the modern capital structure theory is divided into the new capital structure theory the old capital structure theory and the new capital structure theory. Next, we review capital structure theory development from equilibrium thought angle, mainly from partial equilibrium to general equilibrium, static equilibrium to the dynamic equilibrium. As the modern economic basic analysis method, the equilibrium thought is widely applied in the capital structure theory research. In the capital structure theory equilibrium thought mainly has two clues: One is the equilibrium between capital cost and capital income, the other is the equilibrium between the capital structure correlation sides. These two clues both hold the important status, the former in the tradition and the old capital structure theory research, and the latter in the new capital structure theory research.Once more, the key inspection is the relations of capital market and capital structure. The capital market is the capital's origin; the market growth obviously must affect the capital structure. Therefore, it is necessary to establish an analysis frame including firm, stock market, and bond market and bank system. Making use of other's literature achievement, the paper established a general equilibrium capital structure model. In this model, the wealth distribution affects the investment between the firm and the bank.Finally, we use direct-viewing and regression analysis carried on the real diagnosis and the examination to the above analysis frame supposition and the conclusions. We discovered that, capital market equilibrium has the important influence on the capital structure choice. Specifically, when the banking industry concentration ratio is higher, the relevance of firm's achievement and the financial release lever is not remarkable; When the bank intermediary cost is higher, high risk firm offer outstanding share; Along with the risk drop, firm's financing will favor the bank credit; when the risk is very low, the firm will use the negotiable securities financing. Along with increase of the own capital, firm's stock financing ability enhancement.Certainly, this article has many limitations and insufficiency. First, the inspection to capital structure theory in the view of equilibrium thought is rough and imperfect. Second, this article merely inspects the capital structure choice and formation from capital market general equilibrium angle, but not from the dynamic the angle. Third, this model does not concrete discrimination stock financing and bond financing, therefore cannot produce a quite precise capital structure. Fourth, because sample quantity and scope limited, our examination only fit to selected samples. Moreover, regression analysis itself only is indicated between the variable haste relevance which counts, but whether has the corresponding explanation ability does not to have the determinism. Regarding the above deficiency, will continue research thoroughly to explore and the solution in the later.