Research On Property Right, Executive Incentive And Capital Structure Adjustment

The CPC in the 3rd Plenary session of 18 th Congress had promoted “The mixed ownership economy is a significant shape of basic economic system”. The “thirteen five” project had suggested “Non-state-owned capital should take part in the revolution of state-owned enterprises” and “the executive salary system of State-owned enterprises should be reformed”. Currently, reforms of the supply side had involved problems of capital structure, such as: declining the leverage. It is necessary that comparative researches should be done between state-owned enterprise and the private enterprise in regard to executive compensation incentive and adjustment of the capital structure.The modern research of capital structure regards MM theory as a starting point and symbol. Signaling theory, picking order theory, the agency cost theory, corporate control theory, product elements theory, market timing theory and dynamic capital structure theory had appeared subsequently. The research of the capital structure theory had made substantial achievements. However, capital structure theory is a financial theory which established on the western economies. The capital market, legal environment, market economy, legal system and manager market in China are still imperfect, which gave rise to “the single-large shareholder”, equity financing preference, a few dividend. Western capital structure theory may not explain China's economy.This thesis extracted samples including 20 state-owned enterprises and 20 private enterprises by using random selection based on the nature of property right and the asset scale of enterprise to carry on the case comparative research of incentives and capital structure adjustment. The result shows that the incentive of private enterprise was higher than that of state-owned enterprise; Many enterprises had higher debt ratio, and the asset-liability ratio of state-owned enterprise was higher than that of private enterprise, which is not that the corporate governance of state-owned enterprises pay more attention to liabilities, but because of the state-owned enterprises to the existing soft budget constraint; The capital structure adjustment avenue of state-owned enterprises almost as same as that of the private enterprise, the first choice was debt financing adjustment, and the second one was inner financing adjustment, and the last choice was equity financing adjustment. The reason why enterprises choose this path was likely that the Chinese capital market was not developed, which caused the bank credit being the major source of financing, and the enterprises had a preference for not paying dividends; The private enterprise on capital structure adjustment efficiency was better than state-owned enterprise.Finally, the article puts forward suggestions for State-owned enterprises that actively promoting the classification mixed ownership reform and the executive compensation system reform, reducing government administration, strengthening executives equity incentive, reducing debt ratio, perfecting the capital market and the enterprise internal and external supervision.