System, Path Dependence And The Dynamic Adjustment Of Capital Structure In Listed Companies

With the advancement of government regulations, capital market was established andgradually developed in our country. China market economic system is uncertainty becauseof the emerging and transition of economic system. Under such a complex economicsystem, getting insight into how institutional factors influence the company’s capitalstructure adjustment is a much concerned problem. On the basis of referring to theempirical study about the influencing factors of the capital structure, the concept of therelated system, institutional change and path dependence is defined and summarized, and othis paper reviews and evaluates the financing behavior of listed companies according totheir respective characteristics in China.On the basis of the capital structure theory, the existence of the target capital structureand the rationality of the dynamic adjustment of capital structure, this paper uses the73A-share listed companies as samples in Shandong province during2006to2010and makean empirical analysis. The result shows that the system of the stock market, the system ofbond market and the system of the lending market has significant influence on the capitalstructure adjustment. Negative correlation exists between the system of the stock marketand the financial leverage ratio, and between the system of bond market and the financialleverage ratio. The system of the lending market and the financial leverage ratio haspositive correlation. According to the path dependence of "lag effect", using lag one periodof data system variables makes an empirical analysis. The result shows that the system ofthe stock market and the financial leverage ratio has positive correlation, and the system ofbond market and the financial leverage ratio has positive correlation. Negative correlationonly exists between the system of the lending market and the financial leverage ratio. Inaddition, the capital structure adjustment speed is less than1, which indirectly proves thatinefficient of the path dependence.In the end, some suggestions are discussed aboutcorporate capital structure optimization. Summarize the research conclusion of this paper.The shortcoming in the course of there search process and the follow-up study suggestionsare put forward.