The Study Of Dynamic Capital Structure Adjustment Based On Chinese Listed Companies

Capital structure theory is one of the core theory of modern corporate financetheory, the modern corporate finance have began in the paper which Modigliani andMiller proposed the “MM theory” in1958, later researchers have gradually relaxedthe MM assumptions, they have done a lot of detailed studies in aspects of tax, agencycosts, asymmetric information, corporate control and product competition, its purposeis to unlock the "mystery of capital structure." In the21st century, the researchers hasbegan to focus on the dynamic adjustment of corporate finance capital structure, theyhave used panel data methodology based on the dynamic capital structure model, toconfirm the dynamic adjustment of capital structure characteristics. For domestic,with the development of domestic capital market and the maturity of corporategovernance structure, the dynamics of capital structure has become to the focus ofacademic research.Based on the listed companies in China, this paper explore the dynamicadjustment of capital structure from the macro-factors and micro-factors. Firstly, thispaper forecast the company’s target capital structure, we analysis the impact factors ofthe company’s capital structure. Secondly, we establish a partial adjustment model ofcapital structure, using the listed company in1998to2010panel data to study theChinese listed company’s capital structure dynamic adjustment process.Through theoretical analysis and empirical testing, this paper draw the followingconclusions.The Chinese listed company exist target capital structure, there are differenttarget capital structure for different companies.Money supply, real interest rates,non-debt tax shield, profitability, company size, and liquidity variables have notableinfluence on the target capital structure and the adjust speed. The real GDP, stockmarket performance and the growth are no effect on both. Uniqueness have notableinfluence on the target capital structure, but not to the capital structure away from thetarget, while the growth is opposite to the uniqueness.Actual company controller havesignificant impact on the target company’s capital structure and the adjust speed, thelisted companies in China has a clear "dual ownership structure," the state-controlledenterprises accounted for the majority of samples.Holding company’s proportion oftop ten shareholders have significant impact on the target capital structure and theadjust speed of capital structure, have some impact for the listed company’s capital structure choice.