A Correlation Study Between Financial Development And Corporate Debt Financing Of China

Our country begins the reform of shareholding structure of listed company since 2005,with a series of new rules and policies have issued about law and finance,it has optimize and improve the system environment of capital market and stock market.The optimization and improvement of institutional environment will lead to the advantages of equity financing gradually disappear,equity financing costs will gradually increase.At the same time,the superiority of debt financing will be more apparent, the listed company will also be more intent on debt financing of enterprise.However, so far,Because our country is in economic transition stage,the development of capital market is not optimized,and the financial system still needs to be improved in China,most enterprises just focus on equity financing instead of debt financing that cause them facing the problem of inadequate financing.Corporate financing strategy not only directly affects financing structure,and the growth of business, the performance of enterprise and long-term development of corporate will have a profound impact.So with the level of financial development continues to improve.the listed company need to rethink the profound meaning of equity financing and debt financing,and adjust the capital structure properly between equity financing and debt financing,optimize the capital structure to maximize enterprise value.Through the analysis of this paper, the listed company should be able to clearly recognize the specific impact between the financial development and debt financing,and use it as a reference to develop a reasonable capital structure.This study is based on the serious reality that inadequate debt financing,based on the above background, this article selects financial development data and listed companies financial data from 2008 to 2013 in manufacture section as a sample,along with the scale of financial development, the depth of financial development,the efficiency of financial development,the degree of stock market development,insurance density,insurance penetration,government and institutional factors as financial development indicators,Using factor analysis and principal component analysis method to get the composite score of financial development,and add the profitability of enterprise,the growth of enterprise, collateral value of assets,enterprise size as four control variables to build panel data model.And then we use Pearson correlation test and multiple linear regression models to make empirical analysis on the influence of financial development to our corporate debt financing, and try to answer whether financial development can alleviate this irrational phenomenon of finance in China,and then improve our corporate debt financing and optimize the capital structure.Empirical results show that:At first,financial development has a considerable positive effect on corporate debt financing,At the same time,collateral value of assets.the size of enterprise also have a positive impact on corporate debt financing.the profitability of enterprise has a significant negative correlation with corporate debt financing,the growth of enterprise has not a significant relationship with corporate debt financing.Through the research of the relationship between financial development and corporate debt financing based on the perspective of regional financial development,We found that between the financial development and the corporate debt financing has significant negative relationship in the eastern region, the financial development has a considerable positive effect on corporate debt financing in the central region and western region.Finally, throuth using a single index to measure financial development,we found that the main factors affecting the corporate debt financing are the depth of the financial development and the scale of the financial development.Based on the above empirical research,this article finally puts forward proposals of optimizing financial system from to expand the scale of financial development,further deepen financial reform,develop the diversified financial institutions and financial instruments, strengthen the capacity of risk prevention,enhance the efficiency of financial capital,accelerate the reform of the financial system and financial openness.