Study On The Internal Mechanism Between Financing Structure And Corporate Governance

The problem of corporate finance is more than corporate finance outside when encountering capital shortage. The financial structure is not only indicates the corporate borrow money from which channel (bank or money market) and in which way (issuing share or debt) for corporate development, but also reflect the economical relation among interests (shareholder, loaner, manager and employee). This economical relationship is related to different kind of corporate governance structure and effect, which is the reason that economics care for corporate governance. Just as Wilkinson said, capital stock and debt are not so much financial tools as governance and control structure, and the corporate governance is determined by the typical of corporate financial structure, so that there is potential logical relationship between them. Logical financial structure is the base of corporate governance, while high efficiency of the corporate governance is the guarantee of the efficiency of corporate management and interest profit. So to explore the corresponding relationship between financial structure and corporate governance has a great meaning for corporations to set up high efficient financial structure to form logical governance structure in our country.Under the consideration of plan economic system, there was no real corporate and the government, which means, supplied the corporate capital. The corporate governance was consequentially simplex because the government acted as the single financial agency. The simplex finance structure and the inefficient internal finance in long time result in the deviation from the finance structure theory which popular in west counties, which led to inefficiency. The Pecking Order Theory, that is corporate financing generally follows the practices of first internal financing, then bond financing, and finally stock financing. As the development of economics, there is a great reform in corporate finance, as the simplex finance structure that the treasury supplied the capital convert to market led financed, at the same time, the corporate governance turns form single government control to multiply management. But act as a system arrangement there is stock structure with "Chinese character" that absent of owner and controller, in which condition the corporate is still inefficient and has no guarantee for investors' interest.The logical corporate governance is the base of the stock market, the crux that the corporate finance in the money market. To perfect the corporate governance is a necessary step to raise the corporate value and develop stock market normative. Thisarticle focuses on the relationship of the corporate financial structure and the corporate governance, at first; introduce the theory of the corporate financial structure based on MM Theory that related to our topic. Then there goes on discuss the relationship and internal mechanism between corporate governance and financial structure. Because the financial structure is various market economic countries can be divided into two categories: one is the Keep Arm's Financing, as represented by England and America model corresponding "Governance by Objective"; The other is Control oriented Financing, as represented by Japan and Germany and "Governance by Intervention".This thesis discusses the status, the problems and the cause of formation, on the base of the analyzing the relationship between corporate governance and financial structure implied empirical analysis, and then gradually provides a solution which begins with circulate the state-owned stock and the corporate-owned stock, a joint stock reform of state-owned banks and the development of bond market, optimize the listed company's finance structure, and farther amend the corporate governance.