Research On The Effects Of Financing Circumstances On Chinese Listed Companies' External Financing Ways

Financing problem of enterprise is always a hot topic to financial management, Financing problem of west developed enterprise are based on the circumstances with well-developed market system,Chinese list companies are facing a more complex financing circumstances with a unperfect market than the west developed countries'companies do, they also have their own specialty in financing, Distinguished from the prevailing indebtedness financing in the companies of the developed countries where have well-developed market ,Chinese listed companies preferred to finance in equity financing when they want to raise external funds.A lot of positive research has proved the listed companies of our country prefer to equity financing, lots of scholars in our country have a partiality for this phenomenon to analyze the equity financing of listed companies from respects such as the cost of equity financing,system question etc. This paper regards particular financing circumstance that the listed companies of our country are facing as the angle for studying, probe into the environmental impact on external financing ways of listed companies of our country in financing, try to making a rational explanation to the listed companies of our country preferring to equity financing when they have to raise external funds. For this reason, this paper analyzes it in terms of theory firstly, and concludes that almost all the western capital structural theories have a partiality for denying equity financing. By analyzing the current situation of external financing of Chinese listed companies secondly, we find that listed companies in our country have a partiality for equity financing, but its performance behaves badly. At the same time , the listed companies show a rational development in the external financing, the proportion of indebtedness financing increases constantly in the external financing , The financing structure of the listed companies appears more rational than before,but it was caused mostly by the factors of policy .It indicates that the listed companies of our country rely on equity financing excessively and show its drawback,it also indicate that the listed companies are affected by its circumstances of financing to make a rational choice while financing. To above states, By analyzing impact of the financing circumstance on the listed companies'external financing ways, this paper regard it as a"rational"choice for the listed companies to prefer to equity financing under the particular financing circumstances.It shows by analysis that, with development of market and criterion of management and more stronger control, cost of equity financing will be as high as or even higher than that of indebtedness financing in China. If listed companies rely heavily on equity financing , it will cause much bad effect :It is unfavorable to optimize the capital structure of listed companies, unfavorable to make use of the financial leverage, unfavorable to improve and enhance achievement etc, In this paper ,we think that we must improve the financing circumstance of listed companies in order to improve the listed companies'financing structure and make them to make a more rational choice in their external financing ways. We put forward some suggestions accordingly.