Empirical Study On Capital Structure Of Listed Companies Based On The Dynamic Adjustment Model

Capital structure theory is the most important theory of the modern finance theory. For a firm it is very important to choose a better capital structure. It is very significative to study Capital structure for a firm. This paper tries to use the theory and demonstration sturdy, firstly analyze the basis concept and theory of capital structure, find out the determinants of capital structure and adjust speed, based on the dynamic adjustment model and do empirical study for the listed companies of China and supports the theory that the dynamic adjustment model is more accordant with the financing circumstances.The whole dissertation is divided into five chapters:Chapter one is introduction. This chapter discusses about background, incentives, underling theories, briefly reviews the theory of capital structure, and emphatically summarizes the production and scarcity of study on dynamic capital structure theory.Chapter Two introduces the conception of capital structure, and compares the correlative theories, then theoretically analyzes the determinants of capital structure of Chinese-listed companies in detail. This chapter also inducts ownership structure, vocational factor when refer to determinants of the company itself, analyzes affection of macro-economy factors such as inflation and lending rate to capital structure, and furthermore, theoretically analyzes determinants of the adjustment speed towards capital structure.Chapter Three constructs a static adjustment model of capital structure including mixed model and fixed effect model, emphatically conducts a dynamic adjustment model of optimal capital structure, describes ownership structure and vocational factor as virtual variables, and speed is treated as a variable different from the time and industry, not a constant.Chapter Four do the empirical study used the data from 147 listed companies of China from 1997 to 2006. The result indicates: the capital structure of listed companies adjusts to the optimum capital structure, and the cost of exchange is high, so the speed of adjusted is slow. The size, growth, profitability, liquidity, volatility, inflation, the rate is evidence effect the optimum capital structure. The speed is different from the industry, the size and the growth.Base on the conclusion above, Chapter Five makes reasonable suggestions to the problem of capital structure of Chinese listed companies...