On The Optimization Of Capital Structure And Corporate Governance

Since the middle of 1990s, how to establish effective corporate governance has been the critical issue of reform on State-owned Enterprises (SOEs). The dilemma of SOEs in reality is closely connected with the imperfect corporate governance, which is resulted from the defect in capital structure. In the key time of developing Chinese capital market, it has important value in theoretically and intense realistic significance as well. Complexity of capital structure in transforming economic highlights the corporate governance that displays the special institutional characteristic of Chinese capital market and inertial influence of non-institutional factors as well. Through comparison and dynamic analysis, this paper triesto advance some phasic and tendentious principles for optimizing the capital structure and corporate governance. The paper is divided into five chapters. Chapter I reviews the development of theories of the capital structure and corporate governance and defines the meaning of them in this paper. Paving the way for next parts, Chapter II discusses the corporate governance effect of stock rights and creditor's rights from the two sides of concentration and ownership. Especially, the discussion from the ownership has more realistic significance in China with system of socialist market economic. Chapter III analyses two typical models of capital structure and corporate governance, namely the model of corporate governing mainly by shareholders in America and that mainly by the creditors in Japan, which can be used for reference in the reform of Chinese enterprises. Chapter IV analyses the institutional reason why the special capital structure of Chinese enterprises, and points out the complexity of the capital structure and share component of Chinese listed companies and provides the resolution for governance of Chinese listed companies. On the basis of consideration of Chinese economic system, financial system and the status quo of capital market, Chapter V advances the feasible advises for optimizing the capital structure and corporate governance.