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Study On The Financing Behavior Propensity And Its Governance Effects Of Listed Companies

Posted on:2008-04-04Degree:DoctorType:Dissertation
Country:ChinaCandidate:Y YangFull Text:PDF
GTID:1119360242965196Subject:Business management
Abstract/Summary:PDF Full Text Request
Financing decision theory probed into the optimum capital structure decisionfrom the perspective of cost and benefit. However, the variational market environment,the limited financing provision condition, and the conflict of the value propensitiesbetween the decision maker and the company,may lead to the departure of thepractical financing behavior from theoretical optimum decision. Since China isundergoing the period of the working-up of market economy and the fast developmentof capital market, the market environment, financing institution and the governanceenvironment, which the Chinese listed companies are in, are quite discrepant fromthat of the mature markets. Therefore, the financing behavior of Chinese listedcompanies, both in financing pecking order and timing characteristics, presentsfeatures violating what classical theories demonstrated. The expository role that thetraditional theories play is thus challenged. Considering the anomalies of thefinancing behavior that Chinese listed companies exhibit, this paper started with theexploration of financing behavior characteristics of listed companies in China bydemonstration. Based on the empirical results, the causes and mechanism of thefinancing decision are then analysed from the perspective of capital cost and the valuepropensity of decision-makers in different governance environment. Meanwhile, byboth theoretic and empirical analysis, the governance effects of the specific financingbehavior is construed and tested. And the governance efficiency is afterwardsevaluated by the appraising index reflecting the corporate governance target so that bystructural equation model, the effects of the financing structure on the governanceperformance is analyzed. Finally, based on the above analyzing results, the measuresto optimize financing behavior so as to improve its governance efficiency areproposed. The major work of this dissertation includes:With the empirical data of the listed companies in Chinese A share market as thestudy object, the panel data model to analyze the financing order is thus constructed.Thus the financing orders of the Chinese listed companies of differenct size, growthcapability, and leverage level are analyzed. The result is therby obtained that listedcompanies of different type enjoy different financing orders under the specificfinancing environment. With the multi logistic choice model, the timing propensitiesof the different financing choices are studied. The empirical result indicates that the financing propensity of such two equity financing choices as the right offering andseasoned offering and that of the two debt financing choices as bank debts andcorporate bonds are still somewhat different.Based on the intrinsical disparities and internal connection between capital costand financing cost and by computing and comparing the capital cost of differentfinancing means and their financing cost, the constraint ability of capital cost onfinancing decision is analyzed. The result shows that under the condition of the lowefficiency of the financing institution and capital market, the capital cost is hard toconstrain the financing decision of the listed companies, and the disparity betweencapital cost and financing cost breeds the financing preference to equity. Then basedon the analysis of the value propensity of different parties of the financing contract,and the control power allocation under the ownership control of different property, theeffects of the property and control power of the largest shareholder on financingdecision of the listed companies in China are studied. Thereby, the internalmechanism of financing decision is dug out. The empirical result demonstrated thatthe capital structure of listed companies in China changes with the difference of theidentities and the proportion of the shares held by the largest shareholder. However,the realization of value target of the largest shareholders is limited by the microcondition of the listed companies and the financing environmental factors.Combining the agency theory and control power theory with the financingpractice, the governance effects of the equity financing, debt financing, and financialstructure are analyzed respectively by both theoretical deduction and empirical tests.Besides, the governance effects of the specific financing structure is construed fromsuch three aspects as ownership structure effects, stimulating and constraint effects,and control power effects.. The result demonstrates that the ownership structureeffects and the stimulating and constraint effects are robust, while the control powereffects are unnoticeable.Targeted on the governance goal, and with the method of factors analysis, thegovernance performance evaluation index is first established. Then by structuralequation model, the effects of capital structure on governance performance of thefinancing structure are evaluated from both the short term and long term perspective.The empirical result shows that from the short term perspective, the negative effectsof the debt ratio are larger than the positive one. If analyzing from the long termcomprehensive point of view, capital structure has little direct impact on governanceefficiency. Only the indirect effects of the capital structure governance efficiency still exists. The raise of the equity has negative effects on ownership concentration, whichin turn has positive effects on governance efficiency.Finally, based on the analyzing results of previous parts, the way to improve thegovernance efficiency of the financing behavior of listed companies in China isproposed in the last chapter of this paper, from such aspects as the optimization ofownership structure, the improvement of securities market structure, and themodification of financing provision condition.
Keywords/Search Tags:Financing behavior propensity, Capital structure, Financing preference, Governance effects, Governance performance, Value propensity, Cost of capital, Ownership structure
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