The Research On The Capital Structure Of Private Listed Companies In China

In the process of my research in this paper, the development of Private Listed Companies in china is examined firstly. After that, I make a review of the development of the capital structure theory. On the basis, I select the sample companies that will be used in my research from the 100 largest private listed companies in china in 2004 based on certain standards, and make a statistical analysis about the capital structures of sample companies according to the information disclosed by them.The characteristics of private listed companies' capital structure examine are examined from two aspects. From development point of view, the debt to asset ratios . of private listed companies show a tendency to increase, it has risen from 43.69% in 1998 to 57.41% in 2004.Obviously, this has to do with the reality that Chinese capital market are immature, and that banks are dominating over financial system in China. In recent years, the debt to asset ratios of listed companies overall also change upwards, it has mounted up from 50.31% in 2003 to 52.15% in 2004. I also notice that the mean debt to asset ratio of private listed companies is higher than that of overall listed compames. The average debt to asset ratio of Private Listed Companies in 2003 and 2004 was 54.17% and 57.41% respectively, whereas the debt to asset ratio of Listed Companies in the same term was 54.17% and 57.41%. Moreover, the capital structures of private listed companies change towards a certain level. In 2004, the capital structures of 63 sample companies distribute rather closely, vibrating around the level of 57%. However, in 2002 and 2003, they scatter in a larger area, and many companies are below the level of 40%. From 2002 to 2004, the capital structures of private listed companies move towards the average level of 57%. From the static view, I find that private listed companies have different choices from non-private listed companies. With the increase of profitability, private listed companies tend to expand through debt financing. According to grouping analysis, there are differences among companies in different industries. The statistical results also indicate that the debt to asset ratio of companies in eastern developed areas is lower than that of compames in western less developed areas.Based on the research of the determinants of capital structure conducted by foreign experts, I adopt a cross-section data research using the data of disclosed by sample companies in 2004 to examine the influence of corporate characteristics on capital structure. The research results indicate that the capital structure of China's private listed companies is decided by ROA, LR, SIZE, CV and NDT. The debt to asset ratio changes positively with ROA, SIZE, and CV, and negatively with LR and NDT. Growth rate and ownership structure are not statistically significant, and I think there is not a regular relationship among capital structure, growth rate and ownership structure. On the basis of the results of positive research, I make a discussion on the optimization of capital structure of private listed companies.