Chinese Listed Companies Capital Structure Optimization

Capital structure theory had attracted much attention from the field of economics since the MM theory was raised. Many foreign and domestic researchers have done a great number of both theoretical and empirical studies on the capital structure, gaining many achievements. However, due to the economic complexity and peculiarity in various countries, differences on methods and emphases of study, the results of empirical studies are not completely consistent with related theories, even violate them. The capital markets and corporate governance structure in china are different from that in developed countries. In the Chinese context, researching on determinants that influence the capital structure choice for Chinese companies will be extremely meaningful for the standardization of financing activities and the optimization of capital structure.Based on the definition and theory of capital structure, the dissertation discusses capital structure characteristics of Chinese listed companies, and concentrates on studying the determinants of capital structure of Chinese listed companies from external determinants and firm characteristics. Through discuss the capital structure theory and capital structure model, we select six factors for the empirical test, including Size, Profitability, Asset Liquidity, Growth, Non-Debt Tax Shield and Equity Circulation. Finally, we draw conclusions through analyses of empirical results and present some possible suggestions for the optimization of capital structure.The whole dissertation is divided into five chapters:Chapter 1. Introduction. This chapter we discuss about research background, incentives, methodology significance, framework. Definitions of relevant terms, improvement and main content are also given.Chapter 2. Capital structure theory and related concepts defined. We reviewed all kinds of theory of different schools on the capital structure theory. Including of Net Income Theory, Net Operating Income Theory, MM Theory, Trade-off Theory, Agency Theory, Signal Models, Pecking Order Theory and Corporate Control Theory. Then follows some concepts that involved in the definition of related concepts. Including of Capital Structure, Financial Structure, Internal Financing, External Finance, Equity Ownership Financing, Debt Financing and Equity Ownership Structure, with the aim of providing theoretical basis for analyzing the determinants of capital structures of Chinese listed companies.Chapter 3. Analysis of capital structure characteristics of Chinese listed companies and how firm characteristics affecting capital structure choice. This chapter analyzes capital structure current situation of Chinese listed companies and tendency of financing structure, financing ways and industry characteristics. Indicating the characters of capital structure of Chinese listed companies possess:The proportion of external financing is relatively high, and Chinese listed companies show intensive equity financing preference. The debt structure of Chinese listed companies is irrational because of high level of current liability. With theoretical and empirical analysis, this chapter analyzes theoretically how firm characteristics (including:firm size, non-debt tax shields, growth opportunity, profitability, liquidity) affect capital structure choice.Chapter 4. The empirical studies of the characteristics affecting capital structure. This chapter we use Debt-to-Asset Ratio as the dependent variable to conduct regression analysis for testing the six characteristics affecting capital structure. The results indicate that Size and Growth are positively related with capital structure; Profitability, Non-Debt Tax Shield and Asset Liquidity are negatively related with capital structure.Chapter 5. The suggestions of the capital structure optimize Chinese listed companies. This chapter we draw conclusions through analyses of empirical results and present some possible suggestions based on specific determinants for the optimization of capital structure.