The Research On The Relationship Of Product Market Competition And Capital Structure Of Listed Corporations From The Perspective Of Ownership

The theory of capital structure is an important part of financial theory. Starting from the MM Theory, the study of capital structure in the western world kept on continue under the premise of broaden assumed conditions and enriched the modern finance theory enomously. But the classical corporate finance theo ry has ignored the external environment' influence on capital structure in general. In the 1980 s, the research of the relationship between product market competition and financing behavior of corporate and the relationship of prodect market competition and the capital structure began to be focused. As an emerging market, the securities market in China has a different operating mechanism and institutional environment. So based on the mature theoretical achievements of capital structure in the western world, this paper intends to discuss the influence of product market environment on the capital structure under the special forms of ownership in China.The main content of this paper starts with the reviewing of the research results of capital structure and product market competition and the analyzing of the difference between the state-owned and private-owned listed corporations. Then this paper elaborates the classic theory of capital structure and product market competition, putting forward its own perspective of the relationship of capital structure and product market competition and the difference caused by the nature of ownership. In the third part of this paper, I exhibited the statistic analysis of the sample data and summarized the present situation between the product market competition, nature of ownership and the capital structure, underlaying for the following empirical study. The forth part of this paper is empirical study. Based on the data of a-share listed corporations between 2001 and 2014,this paper empirically investigate the relationship between product market competition and corporate capital structure, as well as the difference between corporations of different nature of ownership. The results show that there is an inverted u-shaped relationship between product market competition and capital structure. When the degree of product market competition is on a low level, the liability ratio of the corporations will increase along with the enhancement of the degree of competiton in product market, and when the degree of product market competition exceeds a certain level, the liability ratio of the corporations will decrease along with the increase in the degree of competition in product market. And the sensitive degree of product market competition changes of state-owned corporations is less than non-state-owned corporations, which means that the capital structure of state-owned corporations would change less with product market competition than non-state-owned corporations.