Corporate Finance And Governance Structure

This article consists of four parts, mainly aims at a primary researching and exploring into the circulation of funds in an enterprise and the administration structure of the companies. These four parts are: 1. Analysis on the theory of modem circulation structure of funds in western countries. 2. Analysis on excessive liabilities and preference of the fund circulation. 3. comparison between ways of international fund circulation. 4.The establishment of the Chinese way of enterprise fund circulation. (一) The theory of the fund circulation structure in western countries is mainly the theory of securities, but it probes into the most important ways of fund circulation in western market economies. Early fund circulation theories in the west include theories of net income, net business income and conventional theories. The MM theory after that was the prelude to the investigation of the fund circulation structure of modern enterprises and it is the classical theory of the fund circulation structure in the west. Due to its high abstractness and presumptiveness in specified conditions, it cannot play an important role in actual practice. Following the MM theory, the fund circulation theory has developed into Balance theory, Activation theory, Control theory and Imbalance theory, etc., all of which have made it more practical and it is greatly valued for the choices of the ways of the enterprise fund circulation in our country. (二) In the state enterprises in our country exists a special strange phenomenon: public companies are in excessive debt, while closed companies favorite stock circulation. Even in a very efficient public company, debt circulation is neglected. This is contrary to the fund circulation in western theories. Based on the Balance theory of western countries and the special conditions of our country, we may chose an appropriate economical variable and make an economy model which reflects the most appropriate debt scale of our country and then, through this model find out the source for excessive debt of those closed companies of our country. The preference of stock circulation of those open companies originates from the lack of system basis for a rational choice of the fund circulation. In another word, we think that open companies in our country are not real stock companies,i.e. they are incomplete, and the incompleteness certainly leads to distortion of the fund circulation structure and non-rationality of the fund circulation order. (三) Presently, the typical fund circulation models in the world are the British- American securities circulation modeland and so another Japanese-German bank fund circulation model. By analyzing these two models and their relations with the administration structure, we may better chose and establish our fund circulation model in the market economy. (四) Taking the enterprises as a main part, this analysis is made on the above-mentioned fund circulation models and fund circulation structure theories. That is, through the deepening of state enterprises reform, how can we establish the real enterprise fund circulation model...