The Impact Of Listed Companies’ Intangible Assets Investment On Capital Structure

With intangible assets such as goodwill and technology development to the value of the company brought increasing attention; listed companies on the pace of investment in intangible assets is gradually accelerating, on the other hand, the capital structure of the listed companies in specific internal and external financial conditions, becomes the capital base of a listed company’s normal production and business activities. However, in the evolving process of the intangible assets of the listed companies, whether it will affect the change in the capital structure of the listed company and affect the extent or an unknown problem is the unknown problem. This series of questions is conducive to people that raise their awareness of the value of intangible assets and helping banks and other financial institutions change the heavy physical asset collateral, light intangible asset value of mortgage loans tendency to improve financial services environment, optimizing the company capital structure.This article treats the overall investment in intangible assets of the listed companies as the research object, the emphasis on listed companies overall investment in intangible assets of the company’s capital structure. First, a review and analysis of previous scholars on the issues related to research, and then based on balanced panel data analysis of cross-sectional data, the empirical test of multiple linear regression model from2002-2011in China’s A-share711(7110samples) of intangible assets (intangible assets, goodwill, development spending three explanatory variables) of the listed companies as the overall investment, whether the capital structure of listed companies will impact and affect the degree.The empirical research results showed that:1. China’s listed companies show significant negative correlation between the overall investment of the intangible assets and capital structure of the listed companies; if the listed companies holds excessive proportion of intangible assets, the company’s asset-liability ratio will be reduced.2.There is a significant negative correlation between the goodwill in the intangible assets and the capital structure, showing that, if the proportion of goodwill in the assets of listed companies is excessive, the company’s asset-liability ratio will become less.3. The correlation between the development expenditure and the company’s capital structure is not significant.4.In order to specifying the study, the sample data is divided into different industries, and the results shows that the intangible assets in different industries in China’s listed companies impact differently on the capital structure.On the base of the empirical regression results, the author makes the relevant interpretation and analysis. First the main reason of the negative correlation between the goodwill and intangible assets and the capital structure is that the commercial banks and other financial institutions not only focus on obtaining loans profit but also prevent the risk of loans, which require the listed companies to provide fixed assets as collateral. But if the assets of listed companies have too much similar intellectual property, goodwill and other intangible assets as collateral, it will not increase the company’s debt financing. Similar intangible assets as mortgage collateral are not accepted by the commercial banks and financial institutions, it is not conducive to optimize the capital structure, which affects the company’s governance and enhances the value of the listed companies. Another reason is that if the investment of intangible assets is excess, it will affect the value of the company, and the retained earnings, due to the financing pecking order theory and Financing Preference in China’s listed companies during the financing process, the general corporate will choose the endogenous financing acquisition within the company’s own funds, and equity financing, the last debt financing. This situation will also lead to the same change in the company’s capital structure. Second, the uncertainty of development expenditure and the value of intangible assets, the relatively low success rate of research and development, which has enhance the company’s future value is also uncertain, because these many uncertainties exist, resulting in the ability to obtain the liabilities financing of results is also unknown, and developmen expenditure associated with capital structure is not significant. Finally, listec companies in different industries, there are obvious differences in the industry of it: own characteristics, the composition of the asset structure is also somewhat differen the degree of impact the value of intangible assets of the company are not the same which results in the different effects on the capital structure in the different industries.Finally, based on empirical results of listed companies on how to further strengthen the management of intangible assets and how to optimize the capital structure of listed companies, the relevant policy recommendations.