Research On The Influence Of Industrial Competition On The Optimum Capital Structure Of Listed Company

With the adjustment of economic structure and the acceleration of industrial upgrading in China, whether the differences in optimum capital structure are existent or not between industries, between state-owned capital and non-state-owned capital, as well as among industries becomes the focus in financial industry. From that point, this paper is trying to adopt empirical methods to explore the differences in capital structure caused by the differences of industrial competiveness between different industries and to study the influence of industrial competition on the optimum capital structure of listed company, which thus has the important practical significance in deepening the reform of state-owned enterprises as well as in realizing the good and fast development of enterprises.The object of this study is Chinese listed company. The methods of the study are capital structure theory, industrial competition theory, and the combination of theoretical analysis and empirical research method.The influence and influencing factors of industrial competition on the optimum capital structure of listed company are systematically investigated. First of all, the theoretical foundations of industrial competition and capital structure are expounded in this paper. Then, the current situation of the capital structure of listed company in China, the current situation of industrial competition, and the current situation of the industrial competition influencing the optimum capital structure of listed company are analyzed. Moreover, the problems and causes of industrial competition influencing the optimum capital structure of listed company are analysed. On that basis, the empirical analysis of industrial competition influencing the optimum capital structure of listed company is conducted. Finally, strategies for optimizing capital structure of listed company by industrial competition are put forward in this writing.The research results show as follows:Firstly, the long-term debt of listed companies in China at present is low, but the short-term debt is high. The asset-liability ratio of listed companies in China at present is low, but the share concentration ratio of listed company is high. Secondly, the financial leverage of capital structure is mainly caused by debt financing. Generally speaking, the raising money scale of an enterprise is proportionate to the size of the enterprise without considering the preferred stock of the enterprise. The greater the enterprise scale is, the higher the enterprise corresponding sheer specified number is; but the interest is fixed. The fixed enterprise debt financing cost has little to do with corporate profits. Thirdly, the optimal capital structure correlates positively with the Herfindahl index, industrial concentration, enterprise growth or net sales. The more fierce the competition in the industry is, the less the Herfindahl index is. The asset-liability ratio of the optimal asset structure of enterprise is lower according to positive ratio relation. Fourthly, the optimum capital structure correlates negatively with total asset profit rate, but positively with the ratio of the largest shareholder’s stock of listed company. Based on the research results, five strategies which have the important practical significance in optimizing the capital structure of listed companies in China are posed in this paper like the improvement of the market competitiveness of Chinese products, the adaptation of financing decisions to the competitive environment of companies, the consideration of the asset structure of companies, the perfection of Chinese bonds market, and the strengthening of the governance structure of companies.