An Empirical Analysis On Determinants Of Financial Leasing

In order to provide strong evidence of advancing the better use of financial leasing in firms and perfecting the Chinese financial leasing market, this paper probes into the determinants of financial leasing in Chinese firms, with both theoretical and empirical methods.This paper firstly describes the research background and puts forward the topic. Besides, it introduces the research purpose, significance, content, approaches, as well as break-through points and limitation of the research. Then this paper introduces the theories of financial leasing and those of its determinants. Based on the theories and previous empirical studies home and abroad, this paper therefore brings forward the related hypotheses of the determinants of firms' using financial leasing as well as explains proxy variables defined to test the hypotheses and data adopted. Then by using the sample of A-share listed companies in Shanghai Stock Exchange, which covers a total of 687 individual companies over the period of 2003-2007, this paper first investigates whether the potential determinants, such as tax rate, long-term debt, growth opportunity, profitability and company size influence the firms financial leasing decision respectively based on Univariate analysis. And then the extent to which the impact of the mentioned determinants on financial leasing is also investigated through the Logistic panel data model both for the sample as a whole and sub samples of the same industry. Finally, this paper draws a conclusion from the empirical results and thereby advances some suggestions on promoting firms' using financial lease and developing financial lease industry in view of the current situation of financial lease in Chinese firms.