Research Of Influencing Factors On Capital Structure Of Listed Machinery Companies

Capital structure mainly reflects the rights and obligations of correlative profit operator. It influences the capital cost and corporate value. There are many factors influencing capital structure, including external environment and corporate internal features. Research on the impact of these factors can help optimize the structure of corporate governance and reduce financing cost. There are large number of public companies in mechanical industry which is the basic industry of national economy, some of which faces great pressure of foreign capital M&A. So it is very necessary to optimize capital structure and enhance competitiveness. To solve these problems, we should start from studying the factors affecting capital structure.This paper does both standardization research and empirical research, the object of which is Chinese mechanical industry, and summarizes the industrial characteristics and current situation of Chinese mechanical industry. It combines the existing research results on affecting factors of capital structure with these characteristics and current situation. It uses econometrical software such as SPSS and Eviews to do factorial analysis and multiple linear regression, finds the capital structure affecting factors for Chinese mechanical industry and their mechanism of action, as a reference for corporation in practical decision. The innovation is that its object of study is mechanical industry which is barely studied by others, and uses the latest data to analyze, puts several indexes for every factor in the model to make the result more comprehensive.This paper firstly reviews Western theories of capital structure and domestic relative theories, which including early capital structure (David Durant), classical capital structure (MM Theory), modern capital structure (focusing on information and encouragement), domestic theoretical and empirical research in the latest years. Then this paper summarizes the former research result, and concludes the possible affecting factors into external factors and internal factors. The external factors includes: institutional settings and policy guidance, capital market conditions and external market constraints of corporate governance. The internal factors includes:corporate size, profitability, growthiness, equity structure, tax burden level, non-debt tax shield, collateral value of assets and cash flow benefits. In the next part, it analyzes the industrial characteristics and the problems Chinese corporations are facing. It does statistical analysis on capital structure situation and financing preference of Chinese mechanical industry and finds that the asset-liability ratio is declining, current liabilities part is large and preferences for equity financing is very serious. After that, it does regression on econometric model with cross-section data of Chinese public companies in mechanical industry of the year 2009. The conclusion is that the size of public company, growthiness and collateral value of assets are positive correlative with asset-liability ratio, while illiquid shares and cash earnings ratio are negative correlative with asset-liability ratio, and both relativities are obvious. The ownership concentration, profitability and tax burden are negative correlative with asset-liability ratio, while collateral value of assets are positive correlative with asset-liability ratio, both of which are not obvious.