The Evolution And Endogenous Of Capital Cost Of Public Companies

From the classical time series autoregressive model,we can see that the lag of economic variables has better ability to explain itself.So it can be assumed that the time factor itself may be one of the important reasons for the change in economic variables.Simultaneously,taking into account that before the impact of exogenous shocks on economic variables there may be a certain reflection cycle,it is consequently of great theoretical significance to study the existence and specific path of the influence of evolution on economic variables to better understand the changing trend of relevant economic indicators.In addition,capital costs and the company's production,operation,investment and financing activities are closely related.It is not only an important factor limiting the total amount of corporate finance,but is an important criterion of the evaluation and selection of investment projects and measure the efficiency of enterprise funds.Therefore,it is of great practical significance to explore the change path of the capital cost of the company to guide the investment behavior,improve the company's supervision and understand the company's behavior.Based on both the theoretical and practical value considerations,this paper chooses the capital cost of the company as the research object.We will develop an empirical study on whether the capital cost of the company has the characteristics of general regular fluctuation.Combing the relevant literature can be found,the existing research on the capital cost of the company mainly focuses on the definition,measurement and influencing factors of capital cost,but less involved in the endogenous and evolution of the capital cost of the company.This paper establishes the panel data model for the weighted average cost of capital of listed companies in China.We will extract from the company's initial public offering(IPO)time from the market cycle to describe the impact of capital costs fluctuations in the time variable,and intercept the same listing cycle to establish balanced panel data and group samples based on the same listing cycle,then empirically study the company's capital costs with evolution to verify the existence of endogenous characteristics.And the we will gives the corresponding theoretical conjectures based on the empirical regression results.in particular,this paper selects the full-sample data of China's Shanghai and Shenzhen A-share listed companies from 2002 to 2016,and calculate the company's weighted average cost of capital.Based on the panel data model,the reasonable regression method is used to estimate the model.The paper will empirically test the evolution and endogenous of capital cost of listed companies.The empirical results show that: The cost of capital fluctuates with the change of the company's time-to-time;The first inflection point appears roughly in the 20 th quarter after the listing(5 years),and the second inflection point generally appears in the market after the 48 th quarter(12 years);Even after adding other factors that may affect the cost of capital as a measure of control variables or converting capital costs,the above empirical results are still robust.Therefore,The cost of capital of listed companies has an endogenous effect.Theoretical conjecture that: The endogenous volatility of capital costs as the time of listing increases may include management's emotional factors.The activated state brought by listing is the possible reason why the company's capital costs rise after the listing and reach the first inflection point.In addition,Market regulation,the choice of financing methods of listed companies and the change of principal-agent costs may be the main reason for the capital cost of the company showing the characteristics of N-type curve with the period of listing.The empirical conclusion of this paper verifies that the capital cost of the company has the endogenous conjecture with time changing.Paper expands analysis model used to study the company's capital cost from the perspective of time.The robustness of the empirical results proves that the company's period after listing itself has a strong ability to explain the endogenous changes in capital costs.If the empirical conclusions of this paper can be extended to other variables in the field of corporate financial indicators variables,it may be able to provide a new perspective for future corporate governance research.