The Research On The Preference For Financing Of Chinese Listed Companies

The capital structure issue is the frontier theory of contemporary economics and also one of important topic for management in modern enterprises. The different combination and allocation for the capital resource result in different capital structure, capital cost, benefit confliction,and financial risk, which affect the market value of the corporation.How to coordinate the debt and stockholders'equity by financing is not only the common goal of stockholders and creditors, but also the study focus in financial field. Based on different knowledge to the theory of capital structure and the economic system of each country, the companies from different countries choose various capital structure formations and financing mode. In view of financing theory and practical of western corporate financing should follow the order which internal financing first and then external financing, in external financing it should be debt financing first then stock financing.With the deepening of Chinese financial system and capital market mechanism keep on improving,listed companies have more channels to choose. However, the capital structure of listed corporate in China cares more external financing than internal financing,and also cares more stock financing than debt financing, so shows a very strong stock financing preference. The incongruous phenomenon with western financing theory indicates the particularity of financing behavior for Chinese listed corporation. The analyses reveal that the Chinese listed companies'preference of equity financing has led to a low- efficient financing structure which reduces the efficiency of capital allocation and increases the financing cost. On the one hand,the national stock holder could get profit by invading rights of other investors, which may reduce the capital efficiency of the listed corporation. On the other hand, external investor would have the trend of reversal-choose for lacking of reasonable income of investment, which inevitably effects the sustained development of security market. By studying the theory and practice of the capital market and corporate financing, and the exploration of the relationship between the fostering of capital market, enterprise structure reform and corporate financing pattern, this essay is to find out the appropriate corporate financing pattern which fits our socialist market economic structure.Based on the results of former researchers,the paper utilizes many methods like descriptive statistics and Pearson correlation ,and analyses the factors which affect Chinese listed corporations financing preference, such as financing cost, the special structure of the corporation governance influence, financing environment, supervision policy to settle the problems. The results show that the root cause of Chinese listed corporation financing preference is the systematic factor,ownership structure of listed corporation and the capital market develops. Aiming at the causes of Chinese listed companies'preference, this paper proposes some suggestions to averting the preference of Chinese listed companies. These suggestions are listed below: decreasing and circulating of the non-circulative share; changing the arrangement of the security market; by reforming the system of financing, establishing system of credit;developing the bond market.This paper attempts to study by the above analysis in order to give several inspirations to develop financial theory of Chinese listed companies, and also provide a theoretical basis and practical guidance for the financial judgment and financial policy decision of listed companies.