The Empirical Study On The Impact Of The Industry Competition On The Capital Structure Of Chinese Listed Companies

Capital structure theory has attracted comprehensive and systematic researches since Miller and Modigliani advanced MM theorem in 1958. With the further study, the relationship between the industrial competition and the capital structure has become an important issue in the field of capital structure. For this issue, abroad's scholar are in more comprehensive and in-depth study, and they consider various factors, but domestic research is only at a preliminary stage. So far, there are a great deal of researches in academic community but haven't unanimous conclusions about the relationship between the industrial competition and the capital structure. And between the different research results there is a larger difference, sometimes even diametrically opposite conclusions. Therefore, this paper will discuss this issue, and discuss the relationship between the two from the theoretical and empirical aspects, hoping to achieve certain results and provide some reference for further study. At the same time, I hope to provide some useful inspiration for the enterprises to optimize their capital structure and adapt to the increasingly fierce competition in the market.First, this paper has the theoretical research between the industrial competition and the capital structure at the basis of draw research results which have been achieved by the domestic and abroad's scholar through the method of combining standardized research and empirical research. Then I choose some financial data of Chinese listed companies from 2004 to 2006 year, and have some statistical description and comparative between the industrial competition and the capital structure. After this, I use the method of empirical research to analysis the impact of the industrial competition on the capital structure of Chinese listed companies. The result of empirical research is the same as theoretical analysis and statistical description. We can drive the following conclusions: (1) There are notable impact for industrial competition against capital structure; (2)There are significant differences of the capital structure in different industry. This differences are not caused by the abnormal value of individual industry, but prevailing between industries. (3)The capital structure has a high degree of stability in the same industry. And the differences between industries also have stability. At the end, according to the conclusions and the reality, I make a number of recommendations.