Research Of Equity Financing Preference Of The Listed Companies In China

According to the western financing theory and practice, the internal financing is superior to external financing, debt financing is superior to equity financing in external financing. However, our county's listed companies prefer external financing to internal financing, and prefer equity financing to debt financing, giving keen preference to equity financing. The phenomenon reflects some unique featuers of financing behavior of our county's listed companies. So this thesis chooses the special phenomenon of equity financing preference of our county's listed companies as the research subject, with the purpose to discuss its deep-rooted reason, propose valuable improvement plan, and finally optimize resource distribution in stock market, boost the corporate's operation achievement, and perfect its internal management structure.The thesis includes six sections. In the first section, the main achievements on financing preference issue by scholars from home and abroad are summarized, and the research focus of this thesis is introduced. In the second part, by comparison between our county's listed companies and the western financing theory and practice, it points out unique features of financing behavior of our county's listed companies, and raises the question under study: what are the main factors that cause equity financing preference of our county's listed companies ? In the third and fourth part, the paper analyzes internal and external reasons of our county's listed companies' equity financing preferences. In the fifth section, the financing effectiveness of our county's listed companies is studied, with the result in line with the mainstream viewpoint that the equity financing efficiency is low and operation achievement drop after financing. We discover that the roughly 40% of listed companies are able to utilize raised fund effectively, and the operation achievement and the ability of sustained development are strengthened after financing. Therefore, we should not hold a fully negative attitude to the listed companies' financing effectiveness. Our primary mission is to take the measure to correct over half of, oreven more, listed companies' unreasonable financing behavior. In the last section, some suggestions and proposals are offered concerning the problem.