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Research On The Effects Of Interest Rate On Listed Companies' Capital Structure

Posted on:2006-12-28Degree:MasterType:Thesis
Country:ChinaCandidate:F GaoFull Text:PDF
GTID:2179360182970217Subject:Business management
Abstract/Summary:PDF Full Text Request
Accompany with the maturity of the market economy system of socialism in our country since 1990s, the rapid development of capital market make the direct financing stronger and stronger. The channel of the enterprise financing demonstrates the trend of diversification. As the main body of micro economy, the companies have more spontaneity to adjust their economic behavior to the market environment. The diversification of the channel of financing make the macro economical factors become an important factor when the listed companies of China choose the capital structure. There is a little study on the effects of interest rate on enterprise's capital structure, so the research have certain meaning of theory and reality to the behavioral criterion of the listed company. This paper divides into three parts. Firstly, this paper conducts a comprehensive survey on the theory of capital structure and the decisive theory of interest rates. Secondly, this paper analyzes the current condition of the interest rate and capital structure of the listed companies in our country. Through the analysis shows that the capital structure of the listed companies is not proper and the interest rate on loan in our country has also been distorted in some degree because of the influence of interest rate policy. Then it is empirical study adopted the model of panel data in which 140 companies listed in Shanghai Stock Exchange and Shenzhen Stock Exchange before 1996 are selected as the sample. The result indicates that there is relative relation between the interest rate and the capital structure, and change of interest rate can make great effect on capital structure adjustment. However the relative relation is not as obvious as the foreign researches. Take the difference of the actual policy of interest rate home from the overseas' into account, this paper analyzes the restriction of the interest rate policy on the interest rate and the relation between the interest rate policy and capital structure to present an explanation for the result of this paper. Findings indicated that the distortion value of interest rate on loan must be bigger than net tax shield value in sample time. On the empirical finding basis, this paper puts forward some corresponding policy proposals.
Keywords/Search Tags:listed company, capital structure, actual interest rate on loan, panel data model, interest rate policy
PDF Full Text Request
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