Chinese Listed Companies' Equity Financing Preference And Its Impact On Minority Shareholders' Right

The famous MM theory and a series of modern financing theories of the West have already been demonstrated theoretically and empirically by scholars of west countries. These scholars generally identified with such a pecking order of firms raising their finance: the first, internal equity financing; the second, debt financing; the last, equity financing, however, the application in capital market in China is totally opposite. Through empirical analysis, we can get an idea that there exists a common phenomenon in the capital market of China, the proportion of internal equity financing is smaller than that of external equity financing; Firms prefer external equity financing, so the order of companies raising their finance in China is that: external equity financing, the short-term debt financing, the long-term debt financing, then internal equity financing. After the analyzing of the present condition of shareholding structure and the causes of equity financing preference of listed companies in China, this paper mainly studies the value orientation the source of the large shareholders' in the listed companies in China .Through the analysis of shareholding structure, the large shareholder's control, the causing of interior control, the motivation and condition of the large shareholders and managers' collution, and the regulation which causes the large shareholders taking advantage of minority shareholders by equity financing. According to the present condition of Chinese capital market, there are several counter-measures are presented for the benefits of the public investors who are the main body of the stock market.