A Research On Financing Preference Of Listed Companies In China

The research object in this article is financing behavior of listed companies in China. On the base of analysing the irrational preference for equity financing of Chinese listed companies and its causes, the author tries to put forward some proposals to rationalize financing behavior of Chinese listed companies. Firstly, the article makes a simple introduction to the basic theory of corporate financing. Secondly, the article analyses the present situation of financing behavior of listed companies in China, and points out that listed companies has a excessive preference of equity financing to debt financing. Then the article appraises this preference from theoretical and empirical angle. Thirdly, the article deeply analyses the causes of Chinese listed companies?preference for equity financing, and three main causes are thought to lead to this financing preference: the wrong idea hold by the managers of listed companies of capital cost% the internal conflict of interest in listed companies and the undeveloped corporate bond market in China. Finally, the article put forwards some proposals to rationalize financing behavior of Chinese listed companies, including impelling managers of listed companies to foster right idea of capital cost~ improving the structure of listed company governance and speeding up the development of corporate bond market in China, etc.