Research On The Influence Of Product Market Competition On The Debt Maturity Structure Of Listed Companies In China

In the middle of the 1980s,the study of relationship between product market competition and corporate capital structure took attention of the finance and industry economics fields. Thus completing the splitting state of the two fields for a long time. Later scholars conducted detailed researches in this field and remarkable progress has been made, which enriched the theory of capital structure strategy. With the developing and innovation of capital structure theory, scholars more and more focused on the issue of debt maturity structure which is the one of the important content of capital structure, but relative studies mostly focus on the impact to debt maturity structure caused by inner factors such as corporate features and share ownership governance, there are few papers combining external factors to study this issue. This paper studies the debt maturity structure from external angel of product market competition, and based on the embeddedness theory, combining the share ownership background and the economic development of deferent regions to study the interaction mechanisms from product market competition to debt maturity structure. On one hand, this study enriches the theories of the effect factors of debt maturity structure, on the other hand, this study is extension of the study of product market competition and capital structure in a detailed way.Firstly, this paper reviews the related literatures about and introduces the effects to debt maturity structure caused by ultimate controller and regional factors based on the embeddedness theory. Then we apply descriptive statistics, parametric and non-parametric test to systematically analyze the current debt financing situation of listed companies in China from ultimate controller type, industry and region perspective. In the part of empirical analyse, this paper establishes fixed effect regression model and use the balance panel data of 658 A share companies during 2004-2008 as sample to study the effect to debt maturity structure caused by product market competition. In this part, this paper firstly carries out regression on a whole scale, then by distinguishing the difference of ultimate controller and region, at last, exploring the inner structure variation of debt maturity structure. The whole empirical study is carried out from macro -level to micro-level and in a multi-perspective way, so as to find out the effecting mechanism between product market competition and debt maturity structure. Main conclusions are as follows, The degree of product market competition has negative effect on the ratio of short-term debt while has positive effect on the ratio of long-term debt, and this effect is mort notable on private-listed companies than on state-controlled companies. The region factor has different effect on the ratio of long-term debt of listed companies controlled by different ultimate controllers. The degree of product market competition has positive effect on the ratio of long-term debt in eastern region, while the degree of product market competition has negative effect on the ratio of long-term debt in middle and western region. The unproportional situation of low product market competition with high long-term debt ratio has improved. The effect on the inner composition of debt maturity structure caused by product market competition is different among companies of different ultimate controller . The bankruptcy-effect of short-term bank debt does not play a part on the state-controlled companies. The more competitive the product market competition is, the more preference to bank debt the state-controlled companies are.