Industry Characteristics Of Capital Structure And Optimization Measures Of China's Listed Companies

Capital structure is an old topic of the company's finance. Since Modigliani and Miller's seminal article published in 1958, lots of theories tried to explain the capital structure problem from different perspectives; capital structure has been the focus in financial theory and practice field. The capital structure of enterprises reflects the rights and obligations of stakeholders, which influence and determines the corporate governance structure, and further to affect corporate behavior and corporate value.Western scholars found that industry was an important factor of the capital structure through theory with empirical research. Because enterprises in the same industry faced the same internal and external environments, Asset-liability ratio may be closer. And the system differences in the industry level also can make the debt ratio significant different. But it doesn't arrive at consensus conclusions that if China's listed companies need to consider the industry factor in determining its optimal capital structure. In this paper, we study the industry characteristics in capital structure of listed companies on the base of capital structure theory, with reference to relevant research literature and theory combined empirical research. Firstly, we apply quantitative analysis to discover if there are significant differences between inter-industry capital structure, and then analyses existing capital structure problems of the industry through the theory, and analyze the factors which impact common and differences in capital structure of industry. Finally, we make recommendations to optimize the capital structure of listed companies in China.Through this paper, we can see that the industry is an important factor that affects the capital structure of listed companies in China, but there was a significant difference compared to developed countries, the industry factor has smaller efforts on the capital structure of listed companies in China. A number of factors related to Macro-, micro-interaction make the capital structure of listed companies in an industry have common characteristics, which verify the conclusions of the empirical research. And also because many factors affect capital structure in different directions and depth explain the companies in the same industry have different choices for their capital structure. So we improve the capital structure of listed companies from both macro and micro aspects.