Capital Structure And Corporate Governance Of State-owned Enterprises

Theory of capital structure is one of the most important modern theories of finance. In the seventies of twentieth century, the attention to study on theories of capital structure has been paid to its efficiency on corporate governance. These studies related the capital structure to the governance structure and attained a lot of research achievement. Nowadays, the common argument accepted by domestic and foreign scholars is that: under the existed institution framework, capital structure is the base and principle of corporate governance.Our country is in the period of economic transition and many problems came out with the reform proceeding of stated-owned companies. It is an ordinary phenomenon that the stated-owned companies are in highly debt and the majority of whose creditor is state-owned bank. The traditional relationship between state-owned companies and banks, as well as small proportion of corporate bond financing, leads to failure of constraint mechanism of debt. The state-owned stock is too big in proportion that leads to serious problems of insider control and deficient motivation to managers. Based on the current situation, this paper analyzed the relationship between capital structure and governance structure and proposed the plans to perfect capital structure and governance structure. This article consists of four parts:The first part analyzed the present situation of corporate governance and proposed that we should perfect the capital structure to improve the governance structure of the state-owned company.The second part is the theory summary of the related capital structure and corporate governance. In this part, we collected systematically the reference documents at home and aboard.The third part is the relationship between capital structure and governance...