Research On The Effects Of Companies’ Holding Bank Shares On Short-term Capital Structure Adjustment

China is currently in a typical bank-based financial system. Because of the limitation of external financing channel and market friction caused by institutional factors, lots of companies in China are confronted with problem of financing constraints. The phenomenon of companies’ holding bank shares becomes more common, and companies with financing demand can increase the attainability of bank credit when holding bank shares. Based on the background of A-share companies’holding bank shares, we will analysis the effects on companies’short-term capital structure adjustment in this paper.First, this paper analyzes the definitions and effects of relational financing, factors of companies’ capital structure, and effects of companies’holding bank shares written by domestic and foreign scholars. Secondly, this paper describes the background and phenomenon of A-share non-financial listed companies’holding bank shares, and concludes the methods of holding banks. Thirdly, this paper does the theoretical analysis of the effects of companies’holding bank shares on short-term capital structure, and does reasonable assumptions on how different scales of companies, how different kind of competition degree of industries, how different kind of competition position of companies in the same industry affect short-term capital structure while holding bank shares. Based on the theoretical analysis, we use empirical test to measure how companies’holding bank shares affect short-term capital structure. We structure and select the explained variable and explaining variable, use panel-data regression method to do the analysis. Finally, we propose policy recommendations from the point of view of government and companies. We suggest to strengthen the relationship between banks and companies, and standard the industry and finance combination. Through the theoretical and empirical analysis, we find that:(1) Companies’holding bank shares can decrease the short-term capital structure adjustment and optimize short-term capital structure adjustment through increasing the availability of capital and reducing the cost of capital.(2) Short-term capital structure adjustment will decrease when companies’ holding bank shares. And the higher proportion of companies’holding bank shares, the greater impact on short-term capital structure adjustment.(3) Companies in small scale have a greater impact on short-term capital structure adjustment while holding bank shares, compare to companies in large scale.(4) Listed companies in different industries’holding bank shares have different influence on short-term capital structure, the extractive industry and the manufacturing industry benefit more.(5) Companies in bad competition position have a greater impact on short-term capital structure adjustment while holding bank shares, compare to companies in great competition position.(6) Companies’asset-backed capacity has impact on short-term capital structure adjustment.