Positive Analysis On Public Corporation's Financing Behavior Of Our Country

Modern capital structure theory thinks that the reasonable arrangement of capital structure can decrease capital cost and increase enterprise value. Through further analysis, Myers thinks that financing manner becomes one important instrument of enterprises to signal because of information asymmetry. In American, financing through issuing stock is always misunderstood by capital market, so the chief financing manner is internal financing, the next is issuing bonds, the last is issuing stock. During the course of 1996-1982, the enterprises' internal financing of American accounts for 61%; bonds accounts for 23%; stock only accounts for 2.7%. The situation in our country is contrary to that of American, and most public corporations prefer to issuing stock; rationing stock has become public corporations' object.This paper analyzes financing situation of our public corporations and its reasons, meanwhile, this paper also analyzes the factor of public corporation's financing strategy and the effect of capital structure. The analysis shows that (1) the debt financing strategy is mainly influenced by long-term asset growth ratio, short-term asset growth ratio, equity growth ratio and velocity of account receivable. Debt growth ratio has positive correlation with long-term asset growth ratio, short-term asset growth ratio and velocity of account receivable, and debt growth ratio has negative correlation with equity growth ratio. (2) The equity financing strategy is mainly influenced by juridical person's stock holding ratio, short-term asset growth ratio, debt ratio at the beginning of the year and short-term debt growth ratio. Equity growth ratio has positive correlation with juridical person's stock holding ratio, short-term asset growth ratio, debt ratio at the beginning of the year, and has negative correlation with short-term debt growth ratio. (3) In our country, debt ratio has negative correlation with public corporations' performance, and debt financing manner isn't the signaling instrument of public corporations.This paper put forward advices to standardize the financing behavior of public corporations from three aspects of enhancing efficiency of capital market, solving state stock and internal persons' control, strengthening inhibition of creditor's rights.