The Empirical Analysis Of The Factors Impacting The Capital Structure Of GEM Companies

Capital structure has been the subject of discussion in academia, but today there is no unified theory. Every country owns the different system,and companies may in different industry, so, the research results depends on itself. So far, we can not simply say which theory is right, or which theory is wrong, because they have their own merits and demerits, what we can say is that every market, every business, has its own capital structure, not with the similar to other enterprises.GEM companies, compared with the main board companies, have their own features that led to the theory of capital structure is not fully applicable to the business enterprise precisely. Because there are different characteristics and risks from the GEM Board and the small board, its capital structure’s designation and arrangement, and capital cost, the impact of which is more worth exploring. This article will be based on the existing research of capital structure, and choose the data of CSMAR for the research to further determine the factors of affecting its capital structure.The Full text content is divided into six chapters:The first chapter is the introductory on the background and significance of this research.Then simply describes and presents its ideas and methods, finally is the paper’s innovation and weaknesses and so on.The second chapter is the theory review and literature review, the former half is mainly the Western theory of capital structure, the later is the researches which are conclusions of former progress, and the same time,it also lists the situation which we domestic researches in.The third chapter outlines the profile of GEM, and then describes the characteristics of its financing and, finally summed up the GEM status of the capital structure recently. The fourth chapter focus on the factors which affect the capital structure of companies, and it will explain from two parts, the macro factors and the micro factors.The fifth chapter is to choose the data and determine the variables.In this chaper, empirical methods will be used for analysis on the model, and finally determine the conclusions, and also it will give the theoretical explanation of the empirical results.The sixth chapter is something of policy recommendations According to the above main conclusions of this paper, it will put forward policy recommendations which may be applicable in the real life.The article ultimately concluded that:growth and asset has positive correlation with the capital structure; solvency has a negative correlation with the capital structure; ownership concentration is negatively correlated with the capital structure; operational capabilities is the same; relationship and size are not significant to capital structure; effective income tax rate also has no significance with capital structure.In the following,the article analyzes the main reason for the inconsistent evidence and assumptions.Finally, it put forwards policy recommendations on improving financing ability and external financing environment,which are mean to prompt the healthy development of GEM.The expect contribution as following:first,the article chose the data of 2009,which is the newest,and it also becomes the latest reserch in the capital structure;seconed,it has the conclutions which are different from principle market;third,it puts forward some constructive sujestions.