Research On Capital Structure Of China Listed Companies

Capital structure theory started from 1950s, which has got rapidly development with the use of new economy theory in this field, and it also be a very important part of modern financial theory. As we know, this theories base on the developed countries, which have comparative perfect market. The study on developing countries is relatively less. In China, the research of the capital structure theory is launched with constant promotion of the state-owned enterprise reform, and is still at the starting stage. As the quickly development of china stock market, the deeper research of capital structure become more necessary and possible.In this paper, we are trying to take a deep research on the population characteristic of the capital structure, the decisive factors of capital structure and the relationship between the capital structure and the firm value by theory and positive study. After finishing essential theory foreshadowing, we investigate the population characteristic of the capital structure of Chinese listed companies by comparative with the developed counties' companies and the China unlisted SOEs. The result indicates that the asset-liability ratio are relative low, and have a characteristic of short term. The financing order differ from the pecking order theory, and the listed companies have a preference to issue stocks to finance, we also analyze the reason of the preference. To the decisive factors, we use a capital structure model including principal components and several factor linear regression analysis. The model incorporates cross-sectional data, i.e. a sample of 41 companies in Shanghai stock market observed in 2005, and then makes an empirical study. Then the paper uses liability-asset ratio to describe the capital structure of sample companies; ROE are used to described the performance of sample companies. Through the statistical analysis of the sample companies, we found that performance of sample companies during 2003 to2005 has no relation with its capital structure. Finally, we put forward optimizing capital structure measures on the basis of capital structure influence factor and other relate studies.