An Empirical Study On The Impact Of Macroeconomic Shocks On The Width Of Optimal Capital Structure Interval

Capital structure trade-off theory recognized the existence of the optimal capital structure, and the company in the optimal capital structure is achieving the maximal value of its enterprise value. Scholars believe that the different characteristics of the company determine the optimal capital structure of the company and the optimal capital structure take the form of a specific value. However, the latest research shows that, affected by the cost of capital structure adjustment, the optimal capital structure should be a dynamic range concept, namely the optimal capital structure interval. The difference between the upper and lower bounds of the optimal capital structure interval indicates the width of the interval, which can measures the positive degree of capital structure adjustment, and is more suitable to gauge the behavior of enterprise capital structure.Based on the optimal capital structure interval theory, this paper describes capital structure adjustment behavior in details. From the aspect of capital supply side constraints of the enterprise capital structure adjustment, this research studies the change of the width of the optimal capital structure interval in the face of financial market capital supply constraints. This paper selects the sample data from 2003 to 2014 to make an empirical analysis of the width of the optimal capital structure interval of the listing Corporation in China. The results are as follows:(1) The capital structure of the enterprise is decided by the enterprise's capital structure adjustment demand and the financial market capital supply. (2) The optimal capital structure interval exists and it is determined by upper and lower bounds. (3) When the macroeconomic shocks occur, the optimal capital structure interval will become wider. (4) Enterprise internal financing ability will make the enterprise have a narrower optimal capital structure interval. (5) When the macroeconomic shocks occur, the bargaining power of the capital market owned by the large enterprises can't ease the financing constraints faced by them.This paper not only fill in the blank of the study of the optimal capital structure interval in our country, but also provide guidance for the enterprise if they should adjust capital structure more frequently at the time of the occurrence of macroeconomic shocks, and what's more, this paper alos making policy recommendations to the government to improve the capital market.