Research On Capital Structure, Corporate Governance And Creditor Benefits Protection

Creditors are important stakeholders in business, although the investor protection has been a hot spot in the study of the theory, but in economics, law and accounting to protect the benefits of creditors in terms of a comprehensive study was relatively small. Based on this, this paper will do an in-depth systematic study of the protection of creditor's benefits from capitalist system, capital structure, corporate governance and legal protection.It is the conceptual basis to realize the protection of creditor's benefits that to achieve the combination of registered capital credit and assets credit which focus on assets credit, and to establish the capital credit model which is satisfy to the creditor's needs. It is decided by the corporate ownership theory that the creditor's position and role in the enterprise. "State-contingent ownership" Although in theory allows the creditor to exercise contingent control, but in practice, it is ineffective because of various reasons. So there is requiring the active supervision played by the creditor. The conflict between managers and creditors can be more detente through the agency costs.History of the development of capital structure theory is a history of the evolution of the creditors benefits protection:the Durant who represented the traditional theory of capital structure uphold the supreme interests of shareholders so that they completely ignore the concept of the protection of the benefits of creditors; MM theory as a starting point has being to study the creditors benefits protection problems; information asymmetry as the core of the new capital structure theory has regard the creditors benefits protection as an important part of its research.Managers who control the corporate actually have shown different characteristics when they do capital structure decision-making and investment decision-making, because of "insider control" which is prevalent in Chinese listed companies. Seeing from its appearance, Chinese listed companies'equity financing preference to be able to improve the company's solvency and is benefit to creditors benefit protection. But in fact, it is not the case because the insider's control gain mainly comes from company-paid consumption, lazy, reputation effects from unlimited expansion and etc, although they do not hold shares or holds few of shares. Serious company-paid consumption is a loss of companies' free cash flow. The insider's laziness and over-investment activities will be seriously to reduce the company's profitability and solvency. Free cash flow from equity financing provides a good opportunity for insiders. So insider's company-paid consumption without constraint and over-investment behavior will harm the creditor benefits.As imperfection of protect systems related to creditors benefits, regulatory system and "insider control" issue, Chinese listed companies' asset-liability ratio was significantly negative to companies'value, further empirical tests show that:high-growth of listed companies have a stronger motivation for acts of infringement by insufficient investment in the benefits of creditors; low growth of listed companies have a stronger motivation through asset substitution to violate the benefits of creditors; different types of debts have a significant impact on listed companies investment behavior, The empirical results show that:short-term liabilities and long-term liabilities will help to control the high-growth company that under-investment, there is no more prominent that short-term liabilities than the long-term liabilities for the control of under-investment. In relation to commercial credit creditors, the bank creditor's benefit of low-growth companies has been more damaged, and it is need to be protected.As opposed to a low degree of corporate equity concentration, a high degree of equity concentration, creditors benefits is more vulnerable to major shareholders such as asset substitution and underinvestment in acts of infringement; For low-growth companies, the largest shareholder who is the non-state-owned shares of the company has a greater motivation for acts of infringement through asset substitution interests of creditors, for high-growth companies, the largest shareholder who is the state-owned shares has a greater motivation for acts of assets substitution to damage creditors benefits.In the case of creditors benefits protection is relatively weak, it is necessary to establish the creditors benefits three-dimensional guarantee mechanism as soon as possible to meet the development requirements of Chinese market economy. Its contents should include:the creditor benefits protection preventive mechanism of which the capitalist system is the core, the creditor benefits protection control mechanism of which the corporate governance is the core, the creditor benefits protection remedial mechanism of which the bankruptcy law is the core.