Study On The Equity Financing Preference Of Chinese Listed Corporation

Financing is an important component in the financial administration of corporation, different financing ways form different financing structure, and this has important influence for the development of corporation. Especially with the fast development of the capital market of our country, the listed corporation increases year by year, and is occupying more and more important position in national economy. Their financing way or financing behavior not merely influence the long-term development of corporation, influence the sound development of the capital market too. According to our country's actual conditions, the capital market of our country is a new developing market and the modern corporation system has not been really set up etc. yet, This must make financing behavior and way of the listed corporation of our country have its own characteristics. So study the financing behavior of the listed corporation, discover the problem of its existence, find out its source, for standardize financing behavior of listed corporation, promote long-term development and sound development of capital market its have important realistic meaning extremely. This paper is just based on above consideration, regarding the financing behavior and financing preference of the listed company of our country as the theme of studying.The gradual development progress of decades has already passed in the financing theory, but it is very difficult that a kind of theory can make generally suitable explanations for the financing behavior and financing preference of firm observed, But common understanding of everybody is mat reasonable debt can reach the best financing structure, and realize firm's greatest market value. External equity financing should not be the financing way that enterprises pay the utmost attention to. The financing practices of the listed companies of western countries have verified this theory. While Chinese listed corporation demonstrate the strong preference to equity financing obviously. Shown in the following several aspects mainly:(1) Financing structure. Chinese listed corporation select external equity financing first, as aresult, they demonstrate lower asset-liability ratio.(2) Fnancing behavior. The listed corporation, for not be hesitated to adopt the surplus to manage by the qualification of rationing shares, and do not give up initiatively financing qualification, for obtain more rights and interests fund take the financing way to issue additional new stock.But the consequence brought by the equity preference is that the achievement drops continuously and the efficiency of capital use is low.This paper has analyzed the reason why the listed corporation has equity financing preference. Based on the research results of the structure influence factor of the capital at home and abroad, combine the actual condition of China, summarize the inside factor that may influence the decision of equity financing, and carries out Logistic regression analysis for these factors, empirical test result show the factors that affect the listed corporation's equity financing decision are:(1) Equity structure. Study result show the first big shareholder holds share the more tally, the more the corporation may take the equity financing way. This proves that the unreasonable stock right structure is an important factor causing the listed corporation's equity financing preference.(2) Demand for circulating fund. From really empirical test result ,we can see the listed enterprise's equity financing motivation is mainly satisfy the increased needs of liquid assets, especially for reserve adequate idle capital. But satisfying the demand for capital with the plenty of capitals of rights and interests can cause efficiency of capital use low. This also show the listed company make equity financing decision by considerating not from the long-term benefit angle of company, but from the short-term benefit.(3) Profit ability. Study result show, the stronger corporation's comprehensive profit ability is, the more may choose equity financing. This indicates the business performance of the corporation which choose equity financing is unstable. Higher comprehensive achievement mostly comes from investment return and non- regular profit and loss. Because the level of the return on net assets is determining whether the company is qualified to equity financing, it can be found out from this that the financing behavior of the listed corporation has contacts with achievement standard in the financing policy.(4) The scale of enterprise. Being the smaller in scale, listed company is inclined to equity financing. Under the market economy condition, the size of company's scale has already become the important index of weighing the whole strength of the listed enterprise. A lot of corporation, especially the smaller exist idea of" do heavy to make better", so they utilize the financing chance in order to achieve the goal of expanding.