Governance Of Listed Companies Of China 's Capital Structure Effect

The emergence of corporate has enlarged the meanings of capital structure. Capital structure includes the proportion of the debt and equity, and structure of equity. The governance effect is the realization the aim of corporate governance. Governance effect of capital structure includes the governance effect of equity , the governance effect of debt and the governance effect of both. But the premise of it is the efficient security market and efficient debt guarantee mechanism.The capital structure of Chinese listed company presents the characters of the favoring the equity .Its direct reason is that the cost of equity is less than that of debt. However, the ultimate reason is governance effect of equity is infirmness, the governance effect of debt has strengthened comparatively .The state-owned share is not in charge, and management can not owe the equity and institution investors have not developed, the irrationality of the equity is the main reason of the weakness of governance effect of equity .and the impotence of the stock market can not guarantee the governance effect of equity. In the same time , efficient debt guarantee mechanism has not been built and the corporate bonds market has not been developed ,so the governance effect of debt is strong comparing to the weakness of the governance of equity .So we should reform the property, build the efficient debt guarantee mechanism , cultivate the bond market that we can optimize the capital structure and perfect the corporate governance.