Study On The Industry Discrepancies And Influence Factors Of Capital Structure Of Listed Companies

The capital structure is both a subject of financial theory and a decision making that the companies are faced with. Through the theory discussion for a long time, the western capital structure theory has been already relatively perfect, but the capital structure in China is studied at the starting stage. In recent years, the industry factor becomes more and more important when scholars put the study on the enterprise's capital structure. Many foreign studies show that there are significant differences in capital structure among industries. But the study on difference in capital structure among industries of listed companies in China is just begun. Some scholars pointed out whether or not the industries affect capital structure when they studied the capital structure's influencing factors of listed companies in China, but few of them made more research on the difference in capital structure among industries and the causes.While making the discrepancies of the capital structure industry a studying core, this paper tries to solve the problems that whether there are wide and significant differences among different listed companies in China; whether China's listed companies in the same industry are provided with similar assets debt ratio; to what degree the discrepancies of the capital structure of different companies can be explained by factors on an industrial layer; what differences influences from characteristic factors of different industries on different industries. In this paper, China's listed companies are classified according to the"Industry Classification Guidelines for a Listed Company"formulated by China Securities Regulatory Commission. On the basis of sample figures from the year 2001 to the year 2008, methods, like a descriptive analysis, Kruskal-Wallis H Test, Least Significant Difference Test, a regression with an industry as a dummy variable, and regression with the industry characteristic factors as variables, are employed step by step to examine empirically effects of industry discrepancies on the capital structure of China's listed companies. Conclusions are obtained as follows: prominent discrepancies exist in the capital structures of different industries of China's listed companies, and the discrepancies exist generally, not caused by an abnormal value of a single industry; although prominent discrepancies exist in the capital structure of different industries of China's listed companies, explanatory power of industry factors to the capital structure is relatively low, less than 8%, quite different from the research in foreign countries. On this basis, this paper will further analyze the reason why there are significant differences. We will select some of the main industry features, including company size, profitability, asset composition, industry growth, product uniqueness, industry competition, industry risk and industry trading habits. Then we will use Kruskal-Wallis H Test to examine the differences between every industry feature, in order to make a reasonable explanation. Empirical analysis through multiple regression with the differences between industry features as variables to test the relevance between the differences of industry features and the differences of capital structure. We obtain that explanatory power of differences between industry features to the capital structure is relatively high. Since there are different capital structures between different industries, companies should consider its industry feature and other factors when optimize the capital structure. In this paper, we put the information technology industry for example, combining features of its industry and put forward recommendations to optimize their capital structure.The innovation of this paper is that after the specific and quantitative analysis of differences of listed companies in China, we will analyze the causes from different industrial characters and their impact level with empirical data. This paper takes advantage of a large sample and is developed in a systematical frame, with an eye to the reality of China's situation as well as related literature. As a result, it has its contribution to explain industrial effect on capital structure in a relatively long period of time.