Analysis Of Dynamic Adjustment Factors Based On The Company’s Cptital Structure Model

The capital structure is the result of the financial activities of enterprise, except affected by external macro market, for the process of weighing and game between many stakeholders and the enterprise themselves. In addition, capital structure exist adjustment cost because of asymmetric information and transaction costs. Domestic and foreign research literatures show that there is an optimal capital structure, and the capital structure is dynamic. The domestic literature is concerned with the reference to foreign literature in some indicators, then studying A-share market capital structure factors. However, the capital structure of the GEM market research almost nobody cares. After all, GEM has higher degree of the market, and it’s more representative of the future of Chinese private enterprises. And scientific research done on variables of the impact of capital market is also limited. Therefore, this paper is devoted to study of the GEM listing company’s capital structure, and investigation of the capital structure’s factors scientifically.Firstly, the paper studies the industry difference of281enterprises in China Growth Enterprise Market by Kruskal-Walls test method, which proves that different industries of capital structure are significantly different, while subordinate categories of the manufacturing has no significant difference. Secondly, the paper studies the regional difference of281enterprises in China Growth Enterprise Market by Kruskal-Walls test method. Our country is divided with eastern, middle areas.Dynamic capital structure theory shows that the company exits the optimal capital structure, and the optimal capital structure will change because of the external and internal factors. At the same time, the enterprise will deviate from the optimal structure, and the adjusting needs cost. The paper assumes that the proportion of large share holder, profitability, asset operations, liquidity and non-debt tax shield are negatively related with the optimal, otherwise company size, growth, asset guarantee value are related positively. The adjusting speed of capital structure has negative relation with DIST and growth, which is positively correlated with the size.The paper solves the nonlinear dynamic model with Gauss-Seidel nonlinear least squares estimation. After12times iteration, the result is that the proportion of shareholders is negatively correlated but insignificantly, and company size is significantly positive related, and profitability is significantly negatively correlated, and the growth is significantly positive related, and asset operations is negatively correlated but insignificantly, and mobility is positively correlated, violated with the assumption, and non-debt tax shields is related negatively but insignificantly, and asset collateral value is positive correlated significantly. At the same time, both of DIST and the growth are negative related significantly with the adjusting speed, and the company size is positive related. The goodness of fit reached90.87%, and the empirical result are consistent with preview hypothesis except the liquity.The paper argues with the preview studies that adjusting capital structure need to consider maximizing shareholder value or enterprise value internally to establish a series of appropriate constraints and incentives, at the same time, adjusting capital structure need to consider financing channels, balanced debt structure and related legal and policy externally. The corporate capital structure is related with the internal governance structure. We can establish a series of scientific effective management mechanisms of hiring executives to make sure with the excellent of ability, development of ideas, character, and tolerance and so on. The companies in our country prefer equity financing than debt financing. Even to the debt financing, the companies rely on the banking system mainly. The mismatch of loan term and investment will result in unbalanced debt structure, causing risk easily. Therefore, the government and society should improve and develop the corporate bond market healthily. At present, the lack development of bond market because of the many bond market constraints has become weakness to affect the enterprise capital structure.