The Empirical Analysis Of Capital Structure Of Chinese Listed Companies

Capital Structure is kinds of ways for enterprises to raise funds and the financing quantity by every way. Regularly, there're various financing ways for enterprises which could bring different cost to enterprises and therefore influence the enterprise's final value. Based on the relationship between capital structure and enterprise value, Modigliani and Miller brought out the famous"MM"theorem in 1958, which insisted on the irrelevance of enterprise's capital structure and its value. This theorem symbolized the formal threshold of capital structure's mainstream theory. Then, on the condition of releasing the"perfect market hypotheses", along the"MM"theorem more and more economists made more creative contributions, among which the Pecking-order theory and the Trade-off theory are respectively the representative classical academic fruits of the new and old capital structure theory period.This paper aims to test whether our domestic listed companies'financing behaviors are consistent with the Trade-off and Pecking-order theory, namely whether the western classical academic fruits of capital structure are also applicable to Chinese listed companies which exist in a much different economic system and financial environment from the west. We can find the differences from the current financing conditions and the western academic fruits by test and comparison, according to which we could find out the reasons of these differences combined with China's specific institutional background and economic environment and then establish reasonable and scientific strategies to boost the construction of financing ways of domestic listed companies to indeed make the western classical academic fruits play their instructive roles for Chinese listed companies.The innovation of this paper lies in the breakthroughs from former similar articles when we choose the test samples. Most of former literatures seemed all Chinese listed companies as the whole analysis sample without distinguish, under which the analytic results would confuse or counteract enterprises'financing characteristics of companies with different scales and furture to gain a compromised conclusion. In this paper, considering the specific economic system, financing environment and the concrete historical background of domestic listed companies, referred on the companies'scale, we choose two kinds of enterprise sample- the representative SSE 180 index and the medium and small sized listed companies. At the same time with the test of companies'financing characteristics we make a comparable analysis of these two different-sized companies. Under such sample-choosing way, the empirical analysis results will be more specific and clear which could truly embodies the financing characteristics of Chinese listed companies.