Research On The Causes Of Equity Finiancing Preference Of Listed Campanies In China

Chinese capital market has been developing for more than 10 years and the scale continues to expand .Now it has turn into the major Asian securities market and the most potential capital markets in the world. But compared with the mature capital market of developed countries, China's capital market demonstrated extreme equity financing preferences. On the other side, the stock market has turned into the listed companies` paradise where listed companies can grab cheap funds . This behavior causes a serious decline of the capital market efficiency and harmed the interests of medium and small investors. Even non-tradable share reform failed to thoroughly change the situation. Why China's listed companies have such a strong equity financing preference? How this equity financing preference is formed? The questions will be answered in this thesis.This thesis includes seven chapters. Chapter 1 introduces the topics significance, general framework, research methods and possible innovation. The second chapter researches on the corporate finance structure and the evolution of financing preference. Chapter 3 uses statistics analytical methods to draw the basic features of Chinese listed corporations , then make a brief comparison with the ones abroad. Chapter 4 states that Chinese listed companies factors involves company characteristics and corporate governance factors, and then describes each of these two factors how to affect the financing preferences. In this chapter, I make use of Logistic regression model to analysis the factors of listed companies and finally come to the conclusion that the dominant controllers lead the Chinese listed companies to strong equity financing preference. Chapter 5 demonstrate the equity financing preferences causes from financing costs and the level of bond market development; Chapter 6 studied the effects of equity financing; Chapter 7 come up with advices including optimizing equity structure, improving corporate governance and developing market system.This thesis holds that Chinese listed companies have a strong equity financing preference, and for this reason is to control the characteristics of the people-oriented management structure. Therefore, we must optimize the listed company ownership structure, management structure, market development manager, which can fundamentally change the dominance of the controller, then change the listed companies strong referred equity financing.