The Comparison Study Of Direct Financing And Indirect Financing Efficiency

The most critical problem is financing in the development of modern enterprises. And the financing channels of enterprises are expanding with the development of modern financial markets. In traditionally, commercial banks play an important role in indirect financing of enterprises, and the stock market as the core of modern capital market makes the enterprises have a direct financing channels. So it forms two main financing channels: direct financing and indirect financing. However, the corporate financing must be based on efficiency, and which kind of financing channel is more efficient? It is meaningful to analysis the mechanism of the efficiency of corporate finance, with an effective solution to the corporate financing problem. This is significant to development and stability of the national economy.In this study, we mainly research the efficiency of financing channels, with the theory of corporate finance and corporate finance structure; we explore the effects from the efficiency of commercial banks and capital market efficiency with increasing the efficiency of corporate finance. At the same time, we make some empirical analysis with the perspective of the allocation of funds ,also we compare the direct financing and Indirect financing efficiency. First ,we use stochastic frontier analysis with the model of the transom cost function ,taking Chinese 14 commercial banks in the year 2001-2008 to study the efficiency of China's commercial banks. In addition, we analysis the daily closing sequence of Chinese Shanghai Stock Exchange Composite Index, through the method of smooth sequence of unit root test and serial autocorrelation test analysis. At the same time, with the perspective of the allocation of funds, we use Almon polynomial lag model to study the efficiency of direct financing of capital markets and indirect financing financial institutions.We can see the conclusion from the study.First,with the sustained development of Chinese economy in recent years, China's commercial banks efficiency are constantly improving ,with the obvious of joint-stock commercial raising than the state-owned commercial banks. Second, we can conclude that the Chinese Shanghai stock market has basically reached the weak-form efficient market characteristics. However, the efficiency of the market is much smaller compared to the level of mature stock markets in developed countries . Finally, with the aforementioned theoretical and empirical analysis, we put forward to some policy recommendations to improve the efficiency of corporate finance in China both on their own operations and the external environment.