China’s Shale Gas Listed Corporation Capital Structure Study

As one of the way to evaluate the financial situation of a company, capitalstructure plays an important role for maintaining healthy and stable development ofthe company. Shale gas is a new kind of energy. A healthy development of shale gasindustry is highly depends on the capital structure of its developer companies.Therefore, it is very important to study the factors that affect the capital structure ofthese shale gas developers. However, limited researches focused on these factorscould be found in the literatures. As the capital structures are quite different fromdifferent industry, it is necessary to study how the capital structure is affected in theshale gas industry.Focused on the research method, most of the researches chose a simple aspectand applied static regression analysis on it. However, the nature of the capitalstructure is dynamic. Thus, it will be more accurate to study it within a dynamicframework. In this article, based on the western capital structure theory and theachievements from other countries, the factors that affect the capital structure of theshale gas industry have been studied using a dynamic panel data model. Under thedynamic point of view, it has been studied that how the liquidity of assets, mortgagecollateral value, non-debt tax shields, profitability, growth factors could affect thechoice of the capital structure of the shale gas industry.The article could be divided into six parts. The first part is the introduction,including research background, purpose, significance and current research status athome and abroad about the factors that affect capital structure. The second part is theliterature review of the capital structure theory. The third part is focusing on thecharacteristics and development status of shale gas industry. In the fourth part, adescriptive statistical analysis on shale gas industry capital structure status of Chinahas been conducted through the sample enterprise’s annual report. The fifth part is anempirical research focused on the impact factors to the capital structure of listed companies. According to the capital structure theory, the actual conditions in China,and characteristics of listed shale gas companies, the research hypothesis has beenraised and verified by the panel data model. The sixth part is the conclusion andenlightenment.In summery, this article studies the factors that affect the capital structure oflisting companies using the fundamental theories and examples. Considering theactual situation and the features of new energy industry in China, possible reasonshave been analyzed. According to the results, suggestions of the policies of capitalstructure of listing companies have been given for both government and enterprise.The author wishes it could help the development of the shale gas industry.