The Study On Capital Structure And Performance Of Listed Companies In China

Based on the definition and theory of capital structure, the dissertation discusses capital structure characteristics and status quo of Chinese listed companies, and concentrates on studying the determinants of capital structure of Chinese listed companies from external determinants and firm characteristics. Then, from two sides of ownership structure and debt structure, concentrates on studying the effect on the operating performance of Chinese listed companies. The whole dissertation is divided into seven parts.Chapter1. Introduction. This chapter discusses about background, incentives, underling theories, main content, methodology and framework. Improvements and innovations are also given.Chapter 2. Review of capital structure theory. This chapter review theory of different schools about the capital structure. They are the foundation of this dissertation. This chapter emphatically introduces MM theory, static trade-off theory, pecking order theory, agency theory, signal models, corporate control theory and product market theory. They provide theoretical basis for analyzing the relationship of capital structures and performance of Chinese listed companies.Chapter 3. Evaluation on the performance of Chinese listed companies. In this chapter we review and summarize Chinese scholars' research on the choice of appraisement index about corporate performance, and then analyze the model of principal component analysis. principal component analysis ( PCA ) is used to evaluate the listed companies'comprehensive performance between 2002 and 2006.Chapter 4. Empirical study on capital structure characteristics of Chinese listed companies. The first, this chapter analyzes capital structure characteristics of Chinese listed companies, draws comparison with those in other countries. Then by the factor analysis and stepwise regression, this chapter concludes the main determinant factors and their effect to capital structure. The results reveal: (1) by the comparison between the developed countries and some developing countries, there is the preference to ownership financing in Chinese listed companies; the floating debt is higher, and the funded debt is lower; the equity centralization is very high.(2) In Chinese listed companies, the debt leverage is significant positive to growth opportunity; the debt leverage is significant positive to the tangibility of asset; the debt leverage is significant positive to size of company; the debt leverage is significant negative to non-liability tax shield; the debt leverage is significant negative to profitability.(3) by analysis the impact of firm-specific characteristics as well as macroeconomic factors on the speed of adjustment towards target leverage in Chinese-listed corporations, The results reveal that lower and faster growing firms as well as firms that are further away from their targets adjust more readily. Additionally, we document relations between macroeconomic variables and the adjustment speed, and find that firms adjust faster in favorable macroeconomic conditions.Chapter 5. Study on Equity structure and Performance in Chinese listed Companies. Considering the endogenous of equity structure, this chapter employs two simultaneous-equations models. After controlling relative variables in the test, we find that ownership concentration has significant effect on ccompanies'performance, The fraction of shares owned by the largest shareholder is negatively related to corporate performance, and the five largest shareholdings has positive relation to corporate performance; Proportion of shares owned by state has negative relation to performance, but the legal person shares can increase firms'performance, and there is negative relation between tradable shares and performance.Chapter 6. Considering the endogenous of debt, we employ two simultaneous-equations models. Sampling listed companies from 2002 to 2006, we find as follow: As a whole, debt financing does not constitute a large part of company financing, leaving some space to go; Due to unreasonable debt structure, currently adopted methods in debt financing doesn't help up with corporate governance; The corporate governance effect of floating debt is bad, the rate of floating debt is too high, it should increase rate of long term debt.Chapter 7. Main findings and policy suggestions.The innovations of this dissertation as follow:1. Most study regards the ownership structure and debt financing as exogenous variables, but the ownership structure and debt financing may be affected by companies'performance. So this dissertation consider ownership structure and debt financing as the endogenous variables, study the relationship between Chinese listed companies'capital structure and its performance by employing two simultaneous-equations models.2. This dissertation utilizes the principal components analysis to appraise synthetically Chinese listed companies'performance. By using this method, we select the synthetically appraisement index of performance to test when we study the relations between capital structure and corporate performance. It could conquer the insufficiency of using single index and simple weighted synthetically appraisement on the corporate performance.3. During the positive study we add the control variable including the factors of industrial factor, corporate scale, ability to develop etc, and eliminate the influence which could be caused by the control variable on the relation between the corporate capital structure and its performance. It will improve the reliability of the positive results.4. This dissertation constructs a dynamic model that endogenizes both the target leverage ratio and the speed of adjustment. Using the dynamic adjustment model and panel methodology, we analyze the impact of firm-specific characteristics as well as macroeconomic factors on the speed of adjustment towards target leverage in Chinese listed corporations. It could conquer the insufficiency of using static analysis on testing Chinese listed companies'capital structure.