Study On The Financing Structure Of Listed Companies In China From Information Asymmetry Perspective

Company's financing structure and financing decision has long been the focus of attention in the academic circle as well as in the practice circle. With the rapid development of China's capital market and the expanding financing size of listed companies, more and more foreign theories are imported by our scholars to study corporate finance issues. However, the researches on finding optimal financing structures in China have just started, most of which neglect the influence of external market environment on corporate finance and financing behavior. A complete analytical framework hasn't been established yet. Therefore, from the standpoint of asymmetric information, this article combines market micro-structure theory with corporate finance research to study the financing behavior of Chinese listed companies systematically. The relationship between information asymmetry and financing structure is also analyzed from the theoretical and empirical perspective, which provides empirical basis and data support for expanding our capital structure theory and promoting the optimization of capital structure. Two main points are demonstrated in this paper:1. The influence of asymmetric information on Chinese listed companies'financing decisions. Based on the amendment of Myers pecking order model, this paper tests on the financing structure of Chinese listed companies using panel data, and investigates the influence of information asymmetry on firm's incremental financing decision from a different angle. The results show that Chinese listed companies'interior financing possesses a much lower proportion compared with exterior financing and that equity financing is preferred to debt financing. Besides, information asymmetry is the key factor that drives Chinese listed companies'financing structure, and its'influence on financing choice exists periodically.2. Study on the signaling effect of Chinese listed companies'financing structure. From the point of view on information content of listed companies'financing restructuring and investors'market reaction, this paper studies the influence of financing structure as a signaling tool on micro-market's asymmetry information. The results show that the market reaction on the increasing proportion of equity financing is bigger than debt financing, which proves that equity financing has greater certainty. Besides, firms'financing structure and its adjustment are the key factors that affect micro-market's asymmetry information. And compared with the actual information content behind different financing options, investors pay more attention to the margin of financing structure adjustment.Therefore, information asymmetry and the cost of adverse selection require that Chinese listed companies should make their best financing decision according to their own financial situation and the information environment of financial market, to meet the financial needs of enterprise development and transfer the real information of enterprise value.