Asymmetric Information And Capital Structure In Our Country

With the development of capital structure researches,the existing capital structure theories were discovered more and more questions,They all could not explan capital structure questions in reality very well,or only can explained partial questions.It was because that most researches study capital structure behaviors from their own charactoristics,ignored many important capital market's elements.With the development of researches as well as affected by correlative theories,the capital structure theories are enriching and developping.The models and methods based on Market microstructure plays very important roles in capital structure's development and improvement,and it is the new tendency in capital structure study.Based on considerations above,our research chose asymmetric information of market microstructure to be our objective,using a novel information asymmetry index, based on measures of adverse selection developed by the market microstructure literature,we test if information asymmetry is an important determinant of capital structure decisions,and how it affects capital structure.The study based on market microstructure will lead our results close to reality more.This article draws the following conclusions:(1) We find that asymmetric information in stock market is important - aibeit not the sole - determinants of the financial leverage of companies of our country over the last three years.Different asymmetric information is related to different financial leverage rate,and the difference is significant.(2) We also find that asymmetric information is positive related to capital structure,the more information asymmetric,the higher financial leverage.These findings are robust to controlling for conventional leverage factors(size,Q ratio, tangibility,profitability,country,institu).It is because that,considered to companies with large asymmetric information costs,the low asymmetric information companies will use more debt to cover the financing deficits,so it is close to the pecking order theory in this perspective.(3) Although asymmetric information is positive related to capital structure,the phenomenon of prefering to equity is objective existence.It is because that our capital market is imperfect.