Empirical Study On Equity Financing Preference Of Listed Companies

With the development of capital market, the listed company’s position in our economyis becoming important. Through comparative analysis, empirical testing and other studies,our scholars have found that our listed companies and foreign financing have a bigdifference in financing preference. Our listed companies prefer equity financing, followedby debt financing options, and finally select the internal financing. Different scholars holddifferent views on the specific cause of the phenomenon. The latest research, we find thatinstitutional factors are the root causes. But the researchers essentially attributedinstitutional factors to specific shareholding structure, namely irrational internal structure inprevious studies. However, China has been carried out equity division reform, and theequity division had no significant in financing structure of listed companies.In this paper, through logical analysis, the impact of institutional factors on financingpreference carried out a systematic analysis, including distribution system of capital marketdevelopment, corporate governance structure, the level of growth of financial markets inthree areas. Then equity financing preference is interpreted variables, institutional factors asexplanatory variables, firm characteristics factors as control variables. By using regressionanalysis method and financial data of listed companies as samples, the paper analyzes thathow institutional factors affect our financing preference. This study do not continue usingthe proportion of tradable shares and non-tradable shares in previous research, but ratherselect the indicator of actual control. In order to systematically analysis that howinstitutional factors affect financing preference, the paper introduces cross-variableindicators of actual control and shareholding structure. And I conclude that equity financingpreference of listed companies is the product of Chinese economic reform, and institutionalfactors have a significant impact on financing preference. And the paper provides policyrecommendations. Thereby the listed companies have a optimizing financing behavior andimprove financing efficiency.