Research On Relevance Between Chinese Listed Companies' Capital Structure And Control Right

As a new theory in Finance, the theory of the market for corporate control had a major impact on the traditional theory of capital structure. As a result,the Managerial Model of Capital Structure had been brought up on the basis of the theory of the market for corporate control. The school of the Managerial Model of Capital Structure deems that there is a close mutual restriction relations between the capital structure of a corporate and the contention for corporate control. On the one hand, the capital structure determines the configuration of the control right; on the other hand ,the outcome of the contention for corporate control determines the financial decision making, further ,it also restricts the choice of a company's capital structure. On the basis of the above-mentioned theory and other theories related to the capital structure, this thesis systematical researches the relevance of the Chinese listed companies'capital structure and corporate control.This thesis stresses to study the restrict relation between the capital structure and the corporate control in two ways. Through the study, we find that the influence that the configuration of the control right has on the capital structure is following:(1)there is a curve relation between the degree of separation of the ultimate controlling shareholder's control right and cash flow right and company's debt ratio;(2)there is a larger debt ratio when the ultimate controlling shareholder consists with direct controlling shareholder, compared to inconsistency;(3)the larger that the direct controlling shareholder has equity ratio, the larger the company's debt ratio is. The influence that the capital structure has on the corporate control is following:(1) it restricts the configuration of the control, and reduces the motivation of in-house managers to go after the personal gain, thus reduces the cost of corporate governance's proxy;(2) it impacts on the company's external M&A market, and the capital structure restricts the probability of successful acquisition, and it has a significant positive correlation with the control premium. This thesis attempts to give birth to some enlightenment to Chinese listed companies'capital structure's choice through above research results, and brings some theoretical basis and practical guidance to policy-making related to Chinese companies'finance decision-making and corporate governance .