An Empirical Analysis On The Effect Of Human Capital On Enterprise’s Capital Structure

The traditional theory of capital structure was researched around financialcapital, which mostly unable to answer the question that there are different operatingresults within the same capital structure, the same company and with differentmanagers. Sometimes, the difference was very great. The reason of this phenomenonlies in the neglect of human capital. Therefore, the influence and mechanism ofhuman capital to capital structure is elaborated from the transacting cost andinsufficiency of human capital investment. At the same time, the relationshipsbetween the human capital and financial capital are empirical researched.Now, the study on the influencing factors of the capital structure has someshortages in the variable selection, data selection and researching methods. So, someinnovation researches are made from four aspects.Firstly, the level of human capital is measured by present creating value. Thefactor analysis is studied combined with the other5indicators. By the factor analysis,the comprehensive level of the human capital was represented by the factor scores.Secondly, it is studied human capital on capital structure through collecting thepanel data. The static regression with cross-sectional data is used in the most study ofthe capital structure. The panel data is collected from64listed companies comingfrom the information technology and pharmaceutical industry in Shanghai andShenzhen stock market within2001to2010. The dynamic influence of the capitalstructure from the human capital is estimated by selecting10controlling variable.Thirdly, it is improved in the researching method. In order to avoid somequestion from the constraints of existing theory and the default variable, the VARmodel is used to analysis the dynamic effect of the output and the financial capitalfrom the human capital. At the same time, the improved method of factor analysis isused for the panel data. What’s more, the GMM method is used to estimate thedynamic effect of capital structure from the human capital, which avoids the biasesand inconsistent that coming from the standard parameter estimation with panel data. Fourthly, the regression analyses is made by selecting the ratio of liabilities toassets and the financing debt ratio as the dependent variable, whose regression resultis compared and analyzed.It is discovered by the empirical research of the VAR model that the humancapital is the internal and the radical drive for the economic output. Within thehuman capital, the financial capital and the output, the human capital has the largestand the most enduring impulse effect for itself and the other two indicators.Simultaneity, the human capital is more important than financial capital inexplaining the output fluctuation.In the whole, the scale of the human capital is ascending and the contribution ofthe human capital is consistency with the external economic environment based onthe empirical research of the factor analysis. Furthermore, the comprehensive scoreof the human capital accords with the human capital assets ratio and the score isclimbing up after2006.It is discovered from the study of the GMM empirical research. Firstly, there isa dynamic phenomenon that the capital structure is adjusting for the optimal capitalstructure in the sample companies. Secondly, there is a significant negativecorrelation between the human capital and the debt level in the last two years.Thirdly, the generating internal resource capability is negatively related to leveragebecause of the different level of human capital. Fourthly, except for growth, liquidityand time dummy variables, other indicators of the control variables have the sameaffecting direction. Most of the variables impacting on the financing debt ratio aregreater than that of assets liabilities ratio. What’s more, the macroeconomic factorsare significantly affecting the financing debt, but there is no evidence that themacroeconomic factors significant affecting on operating liabilities.