Determinants Of Capital Structure And Its Changes: The Empirical Research Of Chinese Listed Companies

Capital structure theory has been comprehensively discussed and studied once it is raised by Modigliani and Miller in 1958. Foreign scholars has spent a lot of time to study the determinate factors of capital structure and got useful result. However, foreign scholars study foreign companies and little has been done to study companies in China, a new developing market.This article mainly studies determinate factors of capital structure and its change for Chinese listed companies. We do have research on this topic but it is not enough. Basing on capital structure theory and agency theory, this article summarized determinate factors of capital structure and makes effect assumption for them. Some old assumptions are supported by latest data of Chinese listed companies, and also some new quantitative results are found.This article proved the relationship between capital structure and several factors including profits, expansibility, ratio of legal entity stock and current stock. For example, growing company and the companies in growing stage have more debt. More discussion is focused on the influence of asset scale and stock concentrate intensity to the capital structure and its change. It finds big capital scale may leads to more debt but capital scale enlargement may effectively decrease the change of debt ratio. Stock concentrate intensity has similar effect to capital structure of listed companies, but its change can not influence that of debt ratio.This article also find some different result that ratio of national stock has no correlation with the ratio of liabilities to assets. Ratio of legal entity stock does not influence the change rate of capital structure. It is trying to give explanation.