Correlation Between Capital Structure And Corporate Governance

Entreprices' financing pattern together with capital structure will exert influence on behaviours and interests of its every correlated individual. Securities,as financial contract,contain allocation of its residual sourcing claims and residual control rights. Therefore,choosing finanacing pattern and capital structure is by nature to choose entreprices' governance institution,thus its securities are of different features.The purpose of this dissertation is to form a theoretical framework for the corporate governance in terms of capital structure. Based on the theoretical analysis,we are intend to study current corresponding problems of listed companies in China, then the policy implications will follow. The dissertation is composed of four parts. Section I, presenting the development and international comparisons of capital structure,together with Section II,which demonstrates the core of corporate governance,constitutes a theoretical background. In Section III,we'll discuss the correlations in view of capital structure, it's the body of the whole.The rest part will examine the current problem existed in Chinese entreprices,and a discussion of improvement will be put forward.The dissertation argue that,as for corporate governance,much attention should be drawn to the supplement of equity financing and debt financing.Moreover,advantages as a whole of the two financing methods should be developed.