The Study On The Relationship Between The Capital Structure And The Liquidity Of Stock Of The Listed Company

The capital structure indicates different sources of the enterprise capital, in which stock financing is the primary one, therefore, certain inevitable relationships lie between the liquidity and the capital structure. Domestic scholars has few involved that at present, those literatures on capital structure of the overseas'has referred to the causality between the liquidity and the capital structure (i.e, liquidity affects capital structure), but this article thought these two variables are jointly determined.Bases on the true background of the financing status quo of Chinese enterprises and the liquidity of the Chinese stock market, This article introduces a proposition whether the liquidity relates to the capital structure of the company or not, and analyzes significance of the proposition by summarizing and concluding those correlative theories as well as the demonstrations and research of domestic and overseas.Then it summarizes and concludes the definition of the capital structure along with the correlative theories of the factors, as well as the meaning of the liquidity and that of its factors, and discusses the relationship between the capital structure and the liquidity. Subsequently, the paper puts forward a hypothesis of the relationship between the two. Through a descriptive statistics on the samples, we can determine the research factors and the research samples, and establishes a simultaneous equations model of the relationship between the capital structure and the stock liquidity.In empirical study, we take debt-to-asset ratio, short-term debt ratio and long-term debt ratio to denote capital structure, and take turnover and illiquidity ratio to denote liquidity, as well as, we utilized the method of two-stage OLS regression and panel date to analyze the relations between capital structure and liquidity empirically. As well as, This paper examines and analyzes the different influences of different industries upon the result of empirical studies. At length we put forward our policy suggestions to the development of domestic securities business based on referring to overseas mature as well as advanced experiences and relevant theoretical and empirical studies.