An Empirical Study Of The Interrelationship Between Capital Structure And Manager Payment Contract In Chinese Listed Corporations

Nowadays, the interrelationship between the managers' payment contract and the capital structure of listed companies is a hot in the theoretical finance field. Current empirical researches on this field either aim at the analysis of the influences that manager stock holding brings to the capital structure or focus on how to establish a manager payment contract under its capital structure. These researches mainly use static approach but do not analyze dynamically. Practitioners and scholars have many different opinions on it China's capital market and the manager payment system are not perfect, In order to research the interrelationship between the two factors in china, it is necessary to prove the interaction between manager payment contract and capital structure.This dissertation is an empirical research. First, the thesis expounds the related theory basis of the manager payment contract and the capital structure; then, it makes empirical research on the interrelationship between the manager payment contract and the capital structure, taking the 195 listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange for instance, and choosing the main financial index in 2005 as the sample data and improves the interrelationship; in the end, according to the above research, it puts forward the suggestions on optimizing the company operation structure . The research conclusion, improves that, if the manager has no stock right, the relationship between the short-term encouragement and the capital structure is interactive, namely, the logarithm of the manager's annual payment and the capital-to-debt ratio is prominently negatively related. When manager owns a certain proportion of the stock right, they are still negatively related, but the relationship is not so prominent, at the same time, the manager's stock right rate and the capital-to-debt ratio show the prominently negative relationship .We test the type of company and industry do not affect the negatively relationship between manager payment contract and the capital structure. By changing Leverage Ratio, we found the relationship between manager payment contract and the capital structure also is negative. Next part brings forward some suggestions and research limitations. This part gives the suggestions about how to perfect the capital market system and the manager payment system, including the establishing of the manager payment system, the improving of the company share structure, the perfecting of China's capital market system and the constructing of the perfect manager market structure. Finally, it points out the limitations.