| Since 1950s, when the theory of MM was established, the unfailing research in company capital structure became hot financial topic in the western country. In china, the research in company capital structure became more deeply by the commercial process of bank and the development of capital market. The research of financing order was developed form the research of capital structure. It means the financing choice order when company facing different financing ways, the field related with financing preference. Different financing order give birth to different combination capital source, then different capital structure, different capital cost, conflict of interest, and financing affairs, finally impact the market value of the company. How to control the proportion between debt and the shareholder interest by choice financing way, and set up a best capital structure is the common target of the creditors and shareholders, which is also the focus of the financing theory research.In 2008, US sub-prime crisis lead the global financing crisis. Domestic stock market was shocked by this crisis and fallen down to 1664.93 from 6124.04, because wrong financing or financing delay, so many company stop working, even bankrupt because of lack of circulating fund or fund chain break in the global financing crisis. This paper is base on the background above. The purpose of this paper is to find the domestic listed company's financing preference and the reason by analysis 1990-2008 listed company data. Analyses the reason, give domestic listed companies some suggestion to let get better financing structure. So, it has more realism meaning to research the domestic listed company choosing their financing way.This paper is divided to 6 chapters.The first chapter is the introduction. This chapter introduces the background, target, and the meaning. Also introduce the model and method, at the same time main way and logic structure. The second chapter is the theory and literature review. Our theory is pecking order theory. It's established by Myers and Majluf (1984), and their fellows, they extend the hypothesis complete information in traditional capital structure theory, use information transfer hypothesis to explain the reason of financing order. In the literature review, domestic capital structure research is delayed almost 40 years than abroad research. So we review them individually. And each of them could be divided as positive and negative opinions.The third chapter is the analysis of development of domestic stock market and financing way in each time. Chinese stock market could be divided as initialization stage, accidence stage, marketing stage. Each stage is different because of the stock market development, country police, and financing environment. Thus the listed company's choice is different too.The fourth chapter is empirical test. This is the key chapter of the whole paper. In this chapter time was divided as four stages from the establishing of stock market, by the inflation and deflation cycle. Baskin model is selected to run empirical test on domestic listed company, to check whether they follow the pecking order theory. Sunder-Myers model is selected which also used by many researchers in china. And It's a traffic model which established by Myers and Majluf when they analyzing how information asymmetric impact the investing decision of company. The empirical test of this paper used the Baskin model established by Jonathan Baskin,1989. He explained pecking order theory from the view of transaction costs, individual income tax, and control rights. The conclusion of this paper is Chinese listed company does not follow the pecking order theory. They prefer equity financing to debt financing, internal financing at last.The fifth chapter is the discussion of root cause. Chinese financing system is notably different with abroad system. This difference should impact Chinese company's financing behavior and financing structure. There are six reasons to why Chinese listed company prefers equity financing. (1) Lacking of complete stock market and long-term credit market; (2) Short of credit and legal rules; (3) Listed companies performed weakly, no enough cash, limited internal financing; (4) Special share hold structure force most the state holding company prefers equity financing; (5) Listed company financing cost; (6) Investor behavior choice. Those problems should be fixed, and then listed company could gain the better capital structure and company value by the right financing order.The sixth chapter is the financing way choice in the post-financial crisis. Base on the analysis above, we supply a few suggestions for the Chinese listed company choosing financing in the post-financial crisis. First of all, balance the equity financing and debt financing to minimum financing cost as much as they can. Then reasonable choose long term and short term debt in debt financing.After the split-share reform of listed companies in China, the financing way in china is becoming more reasonable. Debt financing is more complete financing way. Investors are charier of credit risk in the financial crisis. Debt financing is more clarity than other financing way, better watched. So debt financing is safer than the others financing way. The credit risk of the debtor is more controllable.This paper contributed something as follows:(1) long term data analysis and combine the macro and micro analysis with Chinese system. (2) in the positive analysis, the Baskin pecking order theory model is used firstly,the conclusion is Chinese financing from does not follow the pecking order theory.(3)the analysis of conclusion provide suggestions for the financing way in china, listed company should balance the equity financing and debt financing to minimum financing cost as much as they can, and reasonable choose long term and short term debt in debt financing.The shortages of this paper are:(1) in the positive analysis of the pecking order theory, the research is just limited in the scale, the Profit Ability, the chance to grow, and the interest sharing. (2) the data could have a little distortion (3) our data source is CSMAR of GTA, may be incomplete. In this paper, time was divided as four stages from the establishing of stock market, by the inflation and deflation cycle. It could be divided by the industry or area for more analysis. |
