Financing Structure And The Elapse Of Corporate Governance

The adjustment of financing structure will affect the corporate governance, but its mechanism and the way to improve the corporate governance of China's state-owned enterprises through adjusting the financing structure are the subjects facing the reform of our state-owned enterprises. This paper analyses these questions through the methods of game theory, econometrics and new institutional economics, and discusses the mechanism of the effect of financing structure on corporate governance when the control of the firm is not changed.Through theoretical and empirical analysis, the conclusion is got that, if the control of the firm unchanged, the impact of financing structure on the corporate governance shows the characteristic of "path dependence". So, to improve the corporate governance of our state-owned enterprises, we can't simply select between debt financing and equity financing. We should change firm control, and beginning with it, perfect the institutions both internal and external.