Listed Companies' Capital Structure Factors, The Latest Empirical Research

Since Modigliani and Miller published their seminal paper in 1958, the issue of capital structure has generated great interests among financial researches. A vast amount of theoretic and empirical studies has been conducted under the realistic capital market conditions. With the transformation of China's economic institution, the development of capitai market and steady process of the corporatisation of state-owned enterprises, the issue of capital structure of Chinese-listed companies is becoming more and more important.Therefore, this paper empirically explored the determinants of capital structure of Chinese-listed companies using the updated unbalanced panel data. The main findings suggest that some factors that are relevant for explaining capital structure in Western settings provides convincing explanations for the capital choices of the Chinese-listed companies. However, due to the extraordinary institutional characteristics in China, the capital choice decisions also follow the special principles.Furthermore, this paper constructed a dynamic adjustment model of capital structure by employing the econometric method - GMM. The results reveal that there is a moderate trade cost in dynamic adjustment and the speed to attain the optimal capital structure is fairly quick.Finally, this paper revealed some of the deep reasons that resulted in the unbalanced capital structure and suggested the practical methods to improve and optimize the capital structure of Chinese-listed companies.