Research On The Evolution Of The Capital Structure Of Chinese Listed Companies

There are many problems in today's listed companies financing in China, such as unreasonable capital structure and strong preference for the equity financing. Researches on capital structure of listed companies have been studied more and more deeply in tbese few years. Many of them are based on the horizontal static comparison between companies, which just can show the situation of capital structure in some companies in one time. So we thought that completely understanding the capital structure situation of all companies in all time is the only way to learn the capital structure across the board and to find the solution of their problems. For the sake of giving policy advices to improve the capital structure in Chinese listed companies, a vertical comparison of listed companies is taken as the entry point in this paper. Demonstration analysis together with criterion analysis, history analysis as well as logic induction are used to describe the development course of capital structure of Chinese listed companies and to discuss the reason of fluctuation in their history.In Chinese listed companies, a typical preference for equity financing did exist and the capital structure kept stable in past ten years. The main reason is the main body in a wrong place, finance restriction, financing character and difference in financing cost. Though it's reasonable to encourage equity financing in new developed stock market, it's essential to induct listed companies to improve their capital structure. Decentralize the equity financing, free the finance market, adjust the structure of capital market, standardize the activities of the firms and give more financing choice to the firms is the only way to gain the firms' end of improving their capital structure.