Factors Affecting Capital Structure Of Listed Companies In China

The study of capital structure shows that capital structure is a centralized reflection of shareholder's rights and obligations which determines the managing structure of corporations, and has further influences on value of them. Then there were many experts who were concentrating on analysis of factors affecting capital structure of corporations in order to provide some suggestions on optimizing the capital structure. The main job of this study which comprises three parts is to analyzing the affecting factors of listed companies of china.In the first part, the development of modern theories of financial structure is introduced. After the definition of financial structure, it reviews and evaluates the development of modern financial structure theories, including Tradeoff Theory, Agent Theory and Asymmetric Information Theory. These theories are not only the foundation of this study, but also show the significance of analysis of factors influencing capital structure.The second part is analysis of the factors affecting financial structure of listed companies, which is the most important one in this thesis. The relative factors are usually considered as country norm, industry norm and corporation norm which are all mentioned in this thesis. However, the main point of this study is the country norm. As the conclusions presented, we know these factors are the most relative ones, including growth factors, profit factors non-debt tax shield factors and size factors, While other factors, including owner structure and tax rate do net have the obvious influences on capital structure as expected. On the basis of the analysis, the author then gives the further explanations on the influence mechanism combining characters of china's listed companies.At the last part, the author gives some suggestions on optimizing the capital structure of listed companies, which concerns two parts. One is for the single company concentrating on how to choose the proper capital structure and financing instruments considering the characters of its own. The other is for our government, emphasizing on how to establish a good institution environment for corporation's financing.