Research On Financing Structure Of Listed Companies In China

Since the birth of MM theory, the capital structure theory of corporation has been one of the focuses of the field of economics. The modern capital structure theory shows that a company's financing structure does affect its value, so firms usually raise their finance in pecking order: retained earning refinancing, debt financing, and then external equity financing. However, listed companies in China show a totally opposite financing structure with the modern capital structure theory as a whole.To analyze financing structure of listed companies in China, first, based on the relative analysis of financing structure of listed companies in western developed countries, we review current situation in China, and describe and test the financing behavior and the financing structure of China's listed companies. Second, I explainsthe factors of equity financing preference in the following three aspect: cost-financing cost, corporate interior-governance structure, and the externalsurroundings-financing markets. Finally, in order to optimize the financingstructure and enhance firm value, we put forward a lot of countermeasure.By this study, I try to not only add some views on current theoretical literature about financing problem of Chinese firms, but also give some guidance in the practice of corporate financing in China.