China's Capital Market Development And The Selection Of Corporate Financing Structure

Capital market is an important channel for Enterprise's Financing.To some extent,a country's level of development of capital market determines the way a country's enterprises finance,financing costs,financing structure.Capital market acts as a connective bridge between the real economy and the virtual economy.With the development of capital market,the vector of resource begins to change fundamentally. The allocation of resources becomes more and more dependent on financial instruments and financial markets.China's capital market really formed marked by the emergence of the stock market.From then on,China's enterprises' changed the past single way of indirect financing,started up from the capital market for equity financing and bond financing. Capital structure of enterprises has been improved,the level of capital operation improved,too.Our capital market has its drawbacks in the process of providing financing channels:the deformities of corporate bond market development,low cost of equity financing,the stock market becoming to a machine of gathering money for Listed Companies,the capital market having significant functional defect,the level of market development being single,and so on.These defects have become the cause of China's listed companies preferring equity financing;many high-quality enterprises can't gather funds for business development required from the capital market.This paper attempts from both the macro and micro perspective to examine the financing of the current status of China's enterprises.Finally from the factors that cause corporate financing to be unreasonable and solutions to financing dilemma, this paper puts forward recommendations on the reform of our capital markets.The body of this article is divided into four chapters:The first chapter introduces the significance of this article,as well as the literature reviews related to this article at home and abroad and innovative point of this article in a brief introduction.In this paper,from the level of capital market development and financing costs,the significance of the topics is to discuss the means of financing of Chinese enterprises,and to expose the reasons our listed companies prefer equity financing.In the chapter,we searched the literature reviews at home and abroad and current t study.The second chapter of this article can be used as the bedding of the last two chapters.This chapter includes the functions of capital markets,capital market efficiency hypothesis,the structure of the Western finance theory,comparison on corporate financing.First of all,from the extent of reflecting on the information of the market price we introduce three types on the capital markets division;Secondly, we introduce the finance function of capital markets,pricing function,the allocation of resources and providing mobility features.Finally,we introduce the western theory of financing structure and contrast several different businesses financing ways.The third chapter of this article is the core section:the development of capital markets and corporate finance choices.This chapter is divided into three sections:the first part is the phase of our capital market development as well as the changes in the corporate financing structure.As can be seen,from this part,the level of development of capital market is an important constraint to the corporate financing options.The second part introduce the current financing costs in different financing modes.This part also reveals the important reasons that listed companies in China prefer equity financing.The last part of our country focuses on other important factors that cause listed companies to prefer equity financing.ChapterⅣ,the final chapter of this paper,is the recommendations to develop China's capital market.Proposal has two major points:vigorous development of China's corporate bond market;to build multi-purpose,multi-level capital market.