An Empirical Study On The Effect Of Products-market Competition And Asset Specificity On Enterprise's Capital Structure

Capital structure has been a hot topic of research in the field of financial, because it is a great theoretical value and practical significance of the subject.Since the MM theorem, now has formed a large number of schools. Study on the effect factors of firm's capital structure has achieved many results in the field of theoretical and empirical. Especially, now that the capital structure theory was introduced into areas of economics has achieved rapid development.This paper attempts to study the capital structure questions that based on the point of view from industrial organization and transaction cost theory. Industrial organization economics, transaction cost economics are the main branch of the firm theory. In understanding many aspects of corporate behavior, they all have been successful applications, however, based on the framework of these two aspects of capital structure theory study did not receive sufficient attention, this paper attempts to make some efforts in this hope to extend and improve the existing point of view.This paper first defines the concepts of capital structure, product market competition and asset-specific nature of the relevant concepts, products-market competition and asset specificity, From the industrial organization theory, transaction cost theory point of view of foreign and domestic studies in the literature review, do the theoretical groundwork for the later study. Secondly, this paper analysis the capital structure characteristics of listed companies in China and causes by descriptiving statistics, analysis the factors of affecting the capital structure from the industry level and company level, and make assumptions. Finally the article using Eviews statistical software for data regression, with indicators of product-market competition and asset specificity as the main explanatory variable, with indicators of company size, profitability, growth and non-debt tax shield as control variables to establish a regression model to verify the premises.Conclusions found that debt ratio of listed companies is relatively low and current liabilities accounted for most in china, there are significant differences between industries, through empirical study found that there is a positive correlation between capital structure and product-market competition, asset specificity, firm size and growth,. only profitability was negatively correlated with the firm's capital structure.The contribution of this study is studying company's capital structure from the cross-disciplinary perspective and promote the development of the theory of corporate finance, according to the results of empirical research, combined with its own characteristics of China's listed companies, put forward the corresponding policy recommendations to optimize the capital structure of Chinese listed companies. The limitations of this paper is not use of panel data to conduct empirical studies by industry.