Earnings Quality,Ownership And Capital Structure Dynamic Adjustment

The issues about capital structure have always been the popular topic in finance management.In recent years,with the development of econometric,the method applied in the research of capital structure has gradually changed from static analysis to dynamic analysis.Actually,there is always a gap between the company's Actual&Optimum capital structure,while the Dynamic Trade-off Theory holds the belief that the latter can be reached indeed.However,companies would tend to improve the capital structure partly due to the cost generates therefrom even they are willing to reach the optimum capital structure.Based on the analysis of related foreign and domestic papers,a conclusion can be made that remarkable achievements have been obtained in the research of capital structure's dynamic improvement while a few discussions covered the influence made by the quality of accounting earning,which is exactly the important information in the decision of the company's capital structure.Based on the data of China's listed company from 2011 to 2015,this paper has done a regression analysis towards the capital structure's dynamic improvement and the different earning quality in companies.Besides,the paper has made a further study about the influence on capital structure's dynamic improvement made by the quality of accounting earning in the condition of different equity structure.Firstly,optimum capital structure calculated from the fitted model with the applying of target capital structure.Secondly,the quality of accounting earnings measured through the modified Jones model.Finally,the regression analysis been made towards the capital structure deviation model and partial adjustment model.Thus,the paper comes to the conclusion that the quality of accounting earning is negatively related to the capital structure deviation degree while positively related to the speed of capital structure improvement,which are both more obvious in the state-owned company.