Impacts On The Capital Structure Choices Of The Governance Of Listed Companies

The capital structure decision-making is the proper use of optimal decision-making method in enterprise.but because the capital structure decision-making is done by policy makers,the effect of capital structure decision-making depends on the level of corporate governance. Corporate governance either has direct impact on company's capital structure,or company's competitiveness. besides different capital structure's direct impact on enterprise comprehensive capital cost,the options of debt and equity financing reflect the effect of corporate governance. Combining China's reality of corporate governance,from the perspective of the corporate governance The paper discussed the relevant aspects of governance mechanism's impacts on capital structure choice process. And analyzed shareholding structure and board system of internal control mechanism's impact on choice of capital structure,and bankruptcy system and product market competition mechanism of external governance mechanism's impact on capital structure choice. Lastly,suggestions on how to improve corporate governance level and optimize the capital structure for China's listed companies were proposed.First of all,the paper analyzed internal and external governance mechanisms and characteristics of equity structure of listed companies in China's,and pointed that in the beginning of securities market's establishment the split of non-tradable and tradable shares system led to over focusing,so the agents of major shareholders decide capital structure and other financial decision-making only from the interests of the shareholders. Then,using empirical methods the paper anlyzed the shareholding structure's impact on capital structure of listed companies.in static analysis we found that the changes in managers stake and the shareholding proportion of corporate shares and changes in the rate of liabilities are significantly positive relevent,while the changes in corporate growth and capital structure were negatively correlated. The listed company's largest shareholder - state-owned shares have no obvious impact on corporate capital structure. The situation turned for the better after the seperation of shares. Subsequently,from another important aspect of corporate governance - the board structure point of view——the article analyzed its influences on enterprise's capital structure choice empirically,and comparatively analyzed different structure of the Board's impacts on capital structure in two types of enterprises of high-tech and traditional technologies.After researching the impact of the two most important internal mechanism of corporate governance - shareholding structure and the board structure– on capital structure choice,this paper then investigate on the impact of the external mechanism of corporate governance–bankruptcy system and Competition Mechanism– on the capital structure choice. This paper gives a theoretical framework in using the Bayesian probability method to calculate the optimized Debt-to-Asset Ratio and also gives an example of it. Comparing other companies,companies in Financial Distress have their particularity in choosing the capital structure,so this paper put emphasis on the empirical analysis in the process of the companies in Financial Distress choosing their capital structure. Basing on this study,this paper investigates on the relationship of the companies in Financial Distress and corporate governance from empirical analysis aspect.The study shows that China's listed companies in financial difficulties mainly result from low profitability and highly centralized equity. It is necessary to improve China's Listed Companies current situation of "strong managers,weak board of directors" and improve the efficiency of corporate management,consequently avoid the financial difficulties. Finally,the paper discussed the influence of external competition mechanism on the company's capital structure choice,then analyzed and interpreted the main reason of inconsistence between the relationship of listed company's competition strategy and capital structure and the theoretical expectation.The main features or innovative points of this article are as follows:1,This paper researched the corporate governance's impact on capital structure choice from multi-angle. starting with two internal management structure variables of shareholding structure and board structure,the paper not only studied the the Board structure's influence on the capital structure,but also studie board structure of different attributes of high-tech industries,traditional business structure's impacts on the capital structure choice. Then,the article estimated the optimal choice of capital structure of bankruptcy risk via Baysian,and analyzed the relationship between financial difficulties of enterprises and the corporate governance empirically.2,Basing on the background of China's listed companies'share-trading reform,most of the empirical research used 2002-2004 panel data and the 2006 cross-section comparison analysis. And the paper not only researched the internal and external governance's impact on the capital structure choice of listed companies,but also reveals the share reform's specific impact on the issues of the paper through the comparative analysis of two sets of data. 3,This paper built a theoretical model of competitive market strategies and capital structure choice,derived that enterprises owning market advantage and monopoly position should increase their debt levels to get more profits,while enterprises in intense market competition should have a lower debt Level to ensure its competitive advantages.