Corporate Governance Pecking Order Paradox Of China's Listed Companies

With the development of our securities market, our listed companies show the evident preference of stock financing. This kind of preference was reflected in the following behaviour: the unlisted companies strive to list on the market, even in the risk of some illegal means; the listed companies don't let go any financing opportunity and attain the highest allowable financing amount without any concern about these money's future use. This kind of preference is contrary to one of the western classic capital structure theories- the pecking order. We call it as the paradox theory of pecking order. To be different from some experts who focus on the financing cost perspective to analyze the cause of the paradox theory of pecking order, this paper focuses on the corporate governance perspective to analyze the deep cause and puts forward some pertinent measures.Firstly, this paper sums up the theories and literatures about the corporate governance and capital structure. Then, through the comparative study on the listed companies' capital structure from home and abroad, this paper analyzes our listed companies' serious peference of stock financing. Then, it analyzes our listed companies' governance status and points out that our listed companies had existed the governance problems of "domination of a single shareholder" and "insider control" for a long time. Although the non-tradable share reform exerted positive influence, these two problems have been two of the most challenging governance structure problems which our listed companies are facing. Nextly, this paper elaborates the deep cause of our listed companies' paradox theory of pecking order, which is the malposition governance mechanism under the insider control. To make use of the prospective theory on the behavioral finance science, this paper sets up the value model of managers and explains the cause clearly. Finally, from the perspectives of cultivating good market environment and optimizing companies' governance structure, this paper put forward some measures to improve our listed companies' financing behaviour.