Empirical Study Of Capital Structure Historical Dependence And Dynamic Adjustment Based On Data Of Listed Corporate In China

This paper focuses on the capital structure adjustment and financing decisions of China’s domestic listed companies in the context of market-oriented reforms. Instead of sticking to the original study logic, we firstly find the important role of initial capital structure to its following capital structure through qualitative analysis of the raw data, and then set the hypothesis of "capital structure historical dependence". In the trade-off theory framework, we introduce the initial capital structure into empirical model by analyzing the risk preferences of corporation management, and verify the "historical dependence " hypothesis through the empirical results. Besides, our empirical results confirm that the "historical dependence" of financing decisions is the direct cause and the consistence of risk preference is the root cause. Based on the above research results, we use partial adjustment model to test the impact of "historical dependence" on the dynamic adjustment of capital structure, and find it will decrease the speed of capital structure adjustment, which is called "the rigidity of dynamic adjustment of capital structure"...