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A Study Of Equity Financing Of Listed Companies

Posted on:2004-05-06Degree:MasterType:Thesis
Country:ChinaCandidate:X W LiuFull Text:PDF
GTID:2156360095956837Subject:Technical Economics and Management
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In this paper, we do empirical study to the capital structure of listed companies by vast amount of statistics date. The empirical result shows the exist of equity financing preference of listed companies, which is far from the "pecking order theory" of financing in mature capital market. It seems that the equity financing preference of listed company of our country conflicts with the financing theories in mature capital market. But as we analyze the reasons, first by theory analysis and empirical study, we get the result that the forbidden circulation shareholders, which are almost in control status, through equity financing can get great rising in value of their assets. So the equity financing preference is a rational choice when the forbidden circulation shareholders maximize their interest. Second, we compare the cost of equity financing and debt financing directly, and find out the cost of equity financing is lower than debt financing in current period. So equity financing is also the first choice to the listed companies. And third, we analyze the governance structure of our listed companies, and find out that the insider control, which caused by the high proportion state-owed shares and being out-of-place of state-owed shareholder, also strengthen the equity financing preference. In this paper we continue to analyze the characteristic of our capital market and find out that our capital market has structure shortage of disequilibrium of stock market and bond market, and the internal structure shortage of disequilibrium of the stock market and bond market. And these disequilibriums are outside reasons for equity financing preference. Meanwhile equity financing preference of our listed companies causes low efficient of capital usage and influence the efficient of corporate governance of our listed companies. According to the analysis of the reasons of equity financing preference, we know that the preference phenomenon is a rational choice of the listed company and control shareholders and managers. As we analyze in the paper, at present, the listed companies of our country has a preference of equity financing that is also a rational decision when the behavior bodies, such as the listed companies, the control shareholders (esp. forbidden circulation shareholders) and the managers, face with cheap equity financing cost, low efficient corporate governance structure and capital market. ...
Keywords/Search Tags:Listed company, equity financing, debt financing, equity financing preference
PDF Full Text Request
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