CIT Impacts On The Capital Structure Of Listed SMEs In China

The theorical analysis and empirical analysis of the modern capital structure have provedthat the corporate income tax has a very direct effect on the capital structure. However, mostempirical studies were only for main board listed companies. With the income tax system andcapital market are constantly improving in China, it is necessary to compare and analyze thesmall and medium-sized board listed companies to explore and analyzes the results.First of all, this paper starts with the MM theory, and reviews the capital structure theory.And then, we write the literature review of scholars both at home and abroad. Based on it, thispaper and analyzes the mechanism of action of the enterprise income tax’s impact on corporatecapital structure. And this paper analyze the factors that influencing the effect of the tax.The regression analysis of this paper show that: the enterprise income tax has positivecorrelation with the asset-liability ratio of small and medium-sized board listed companies. Contrast whit the main board listed companies, the total assets ratio of the listed SMEs is low. Thecorrelation of the enterprise income and structure is low. We doubt that the listed SMEs canmake full use of the bond market and credit market. This paper also analyzes and discusses theempirical results of other control variables.In the end, in terms of improving the credit market and bond market, developing the marketfor the assignment of creditor’s rights and imposing the capital gains tax，this paper providessome suggestions respectively. Improving the borrowing environment and improve the effect ofthe tax.