The Nature Of Ownership, Stock Liquidity And Dynamic Adjustment Of Capital Structure

The composition of enterprise's capital structure is one of the important factors influencing the financing decisions of a company, which even affects the future development of the entire firm to a certain extent. Due to the fact that various factors connecting to the capital structure always change, So it is necessary to constantly adjust and adapt to the company's conditions. On the one hand, the enterprise adjusts capital structure to adapt to the development of the macro and micro environment according to the change of economic climate and its own situation. Studying the Chinese special system background and the comparison between state-owned enterprises and non-state-owned enterprises, the paper examines the differences under different ownership. On the other hand, stock liquidity will affect the conversion of assets, stock returns, the ability to raise funds and equity financing costs. Therefore, this paper study the relationship between ownership, stock liquidity and corporate capital structure dynamic adjustment based on the dynamic capital structure theory and asymmetric information theory. Moreover, this paper investigates whether different ownerships would affect the speed of adjustment of the stock liquidity on the corporate capital structure.This study sample is 2011-2014 China's A-share listed company. Amihud measure is taken as the proxy variable and is used to build dynamic adjustment model. The descriptive statistics and OLS regression analysis are employed. And based on this, the nature of the ownership of listed companies will be divided into state-owned and non-state-owned. It aims to discuss whether different ownerships would affect the speed of adjustment of the stock liquidity on the corporate capital structure.Research results show that the speed of capital structure dynamic adjustment of the state-owned enterprises is slower than that of the non-state enterprises. Market liquidity with dynamic adjustment speed is positively related to capital structure. In addition, this study also finds that under different ownership property, stock liquidity on the effect of dynamic adjusting speed of capital structure can produce significant differences. Compared with the state-owned enterprises, non-state enterprise stock liquidity effect on dynamic adjustment speed of capital structure is more noticeable. Finally, based on the above research conclusions, this paper puts forward some related policy suggestions from the following three aspects: improving the structure of the ownership of enterprises, improving the stock liquidity and optimizing the capital structure. These suggestions will help enterprises to adjust its capital structure more effectively.