Research On Debt Structure

Funds are the premise of corporate existence. Diverse sources of funds exist on the market. The external financing of enterprises could be equity financing or debt financing, business financing options didn’t only have connection with the market conditions but with the plan of development. Due to the fact that China’s market economy has not yet perfect, the agent cost of our corporate finance is very high. Enterprise development funds always need to be addressed. The choice of funding sources is now facing an critical decision.After the economic crisis, if the enterprise finances through debt financing, debt structure will change. Then combining the life cycle of the development of enterprises, What’s needs to research is how to adjust the debt structure with a reasonable financing tools and financing terms to the capital to get the maximum efficiency of the role has practically important significance.Due to the current stock market downturn, corporate fund-raising seems difficult from the stock market, so the debt market has become the new source of corporate finance. However, corporate finance should be planned carefully. It should be analyzed and evaluated according to their own conditions, and then determine the program. More global concern of the Greek debt crisis is a result of government borrowing over its solvency crisis of confidence.The corporate finance theory stems from MM theory. However it is in a much stringent constraint conditions. In the real world, to meet the assumption of perfect capital markets is impossible, Scholars began to study the relaxation of certain conditions With the development of information economics, the focus of research is basically focused on the impact of information asymmetry on the choice of financing structure. Many foreign scholars have explored the structure of corporate finance from some new perspective, such as life-cycle perspective and made some progress. In general, the financing of enterprises will be affected by the environment of enterprise in which both include the current internal and external, the enterprise’s own reputation, corporate liabilities existing, generate incremental cash generating capacity and other factors. Therefore, the life cycle theory provides a new perspective for the study of corporate financing. The life cycle perspective, From which most are a number of foreign scholars, its findings are based on foreign data, it still be a question whether these conclusions adapt to our country or not, This paper’s main objective is to examine that whether our corporate’s debt financing structure is in consistent with the corporate life cycle or not, and hope that through studying debt structure to help China’s development of the theory of debt financing and make a useful supplement.This paper’s innovation lies in the following areas:(1) research methodology, this article study the relationship between their debt structure and corporate life cycle Analysis referred to previous scholars based on the theory from the perspective of corporate life cycle, using Dickinson(2006) life-cycle approach, the data is from2006to2010in the Shanghai Stock Exchange all non-financial listed on the Shenzhen Stock Exchange A-share listed companies as a sample,.(2) selection of sample classification variables, this paper not only select the allocation of the corporate life cycle but classified according to industry type, making a more detailed classification of research. Through dong reasonable and accuracy of the inspection of the classification prove that the dual-classification method has a better distinction.(3) in the choice of explanatory variables, the different characteristics of the debt structure, the short-term debt is mainly used to maintain the daily business capital chain, and long-term debt are mainly used for value-added activities, this article will return on capital is defined as long-term return on capital, this will better enable distinguish the capital that to create value and benefits, for matching more reasonably.The study is divided into five parts:Chapter1, Introduction. We described the research background and significance of the topic of this paper to study the purpose and content of research and the research significance and contribution.Chapter2, The relevant theory and literature review. The main content of this section and then find the clues to help continue the research by reviewing the research literature related to the corporate life cycle of the domestic and foreign debt structure,Chapter3, The empirical research design and model construction. This chapter by drawing on the the Dickinson cash flow divided enterprise life-cycle approach, divides the study sample into five life cycle stages, and according to our specific situation further divide sample in accordance with the nature of the industry classification, and two classification methods have been classified in descriptive statistics.Chapter4, the empirical analysis of corporate debt structure. This chapter is the empirical part of this article, the first section of this chapter is the sample mean T-test method after which proves the validation and applicability of two classification, then according to the four assumptions in chapter2of this study,section Ⅱ of this chapter makes the following assumptions:Hypothesisl. Debt structure and financing efficiency negatively correlated.Hypothesis2, growth opportunities and debt structure is negative correlation.Hypothesis3, cash flow risk and debt structure is positively related toHypothesis4, company size and debt structure is positively related to.Hypothesis5, the effective tax rate and debt structure is negative correlation.Hypothesis6, the duration of its assets is negatively correlated to debt structure variables.Section Ⅲ of this paper is the model part. Depending on the type of study samples to construct a panel data model, and through the panel equation, the Hausman test has been the application of the classification model of different samples. In section IV of this chapter is the empirical analysis, first sample of this study the overall descriptive analysis, that the debt structure changes significantly after the accounting reform, increase the instability of the data also shows that China’s market-oriented reform process is accelerating. Then conducted a correlation analysis between the study variables, the independence of all variables from the Pearson correlation coefficient table is very strong, to prove that serious collinearity problem does not exist between the study variables constructed in this paper. Section Ⅳ of this chapter is the panel regression analysis. That listed companies in China has different characteristics in different life cycle stages, in the corporate life cycle for an initial period to maturity, in the recession of the phase-out period between the utilization of the company’s capital and the company’s capital by the panel data classification and regression matches shows that there are significant differences. And different types of enterprises is also inconsistent performance of the manufacturing and non-manufacturing has similar performance in addition to maturity and other life cycle stages are inconsistent characteristics.Chapter5, conclusions and recommendations. Used the empirical analysis of the test, the conclusions of this paper, and pointed out that this article exists some limitations, and research findings, several suggestions for corresponding improvement in the company’s debt structure.Compared with the previous research findings of this article, by constructing a panel data model and found that the tax assumptions in the debt structure of listed companies in China is not established, and also verified the growth of the enterprise has a small impact to the debt structure of listed companies in China, which is the same conclusion (Fang Liying,2005), with her conclusions on the matching of the company’s assets and the maturity structure of debt, she thinks our country’s assets and debt structure matching assumption. Through empirical research this paper proved that the debt structure and asset structure of listed companies in China to be matched.