Ownership Structure And Financing Preference Of Listed Companies In China Relations

China's stock market has experienced a rapid development in recent years. Up to Aug 31th, 2004, there are 1380 listed companies ( A and B shares ) with total value of 3903.139 billion Yuan, mobile share's value of 1222.373 billion Yuan and total stock of 704.726 shares about 30% GDP. The stock market has become the main part of china's economy and played more and more important role. But our stock market keeps depress and most of investors have suffered lots. The development of stock market has met a big problem due to the unreasonable stock structure and financing approach of listed companies. The unreasonable stock structure of listed market brings a series problems, especially the financing preference which has turned to be the biggest problem recently. The purpose of research is to find the relationship between stock structure and financing preference and then give the suggestions to solve the conflict between the arrangementof company's stock and the financing preference.tied with the recent development of western financing theory, the paper discusses the company's financing theory on basis of MM theory and asymmetric information. The author analyzes the financing structure and stock structure of listed companies from 1995 to 2003 and points out that the shares' separation structure of listed companies is the cause leading to the financing preference of listed companies, meanwhile, the author points out that there are natural relations between stock structure and financing preference and it is theinevitable way to solve the problem of shares' separation in order to solve the money enclosure behavior of listed companies.on the other hand, we should realize that shares' separation is not the only cause to the financing preference of listed companies and there are some other causes from limitation of capital market such as inspection, corporation governance, law and culture problem of capital market.It is a huge and innovative work of researching on the relationship between stock structure and financing preference, therefore, it is also a systematic and synthetic topic to solve the problem due to financing preference of listed companies.