A Study On Listed Company Financing Preference Based On The Pecking-order Theory

China's Securities Market grow well since 1990s, but it's significantly different from that of developed countries. Our listed companies are more dependent on External Equity Financing, which is different of the pecking order theory. This un-normal phenomena leads to poor efficiency of resources allocation on the other hand. This years more and more people pay attention to the phenomena。This paper pays attention to China's listed companies'preference of External Equity Financing based on the Pecking Order Theory. Firstly literature review is listed in chapter 2, which includes the theory of Net Profit, theory of Operation Profit, MM Theory, Incentive Theory, Control Rights Theory and Pecking Order Theory. Review of researches on this topic in our country is also included. In order to explore the reasons of preference of External Equity Financing, the article analyzes China's financing system evolution from the planned economy to transition period until the establishment of the securities market in 1990s. And then in this chapter analyzes the financing mode of developed countries includes UK-US Model, Japanese and German Mode, which all follow the pecking order theory regardless their slight differences.In chapter 4 , the paper selects the companies of shanghai and Shenzhen markets which have chosen the equity financing in 2002-2007 and selects some available variables such as capital structure(asset-liability ratio), growth ability(total assets growth ratio), profit ability(return on net assets), enterprise scale(natural logarithm of total assets), value of assets guarantee, state-owner shareholding proportion, current share proportion and internal control phenomena(internal director proportion). The empirical research shows that capital structure, growth ability, profit ability, enterprise scale, state-owner shareholding proportion and current share proportion are correlated with equity preference, but this paper finds no distinctive correlation between value of assets guarantee, internal director proportion , state-owner shareholding proportion and equity preference.At last, this paper put some forward suggestions to improve China's Securities Market according to the conclusion.