Cash Holdings, Financial Constraints And Nonlinear Adjustment Of Capital Structure

The capital structure of the company has always been widely concerned by scholars at home and abroad.Capital structure is also one of the most valuable academic research and practical significance in corporate finance.As a very important indicator of corporate finance,how to choose the capital structure for enterprises to reduce costs,access to higher returns play a vital role.Capital structure of the rational choice for the development of enterprises laid the foundation,so as one of the important elements of corporate governance,the theoretical study of capital structure and practical decision-making has become an unavoidable topic of the enterprise.Nowadays,with the increasingly complex enterprise environment,in many cases the static capital structure theory can not explain the actual situation of the capital structure of the enterprise reasonably.Therefore,it is the mainstream of the academic circles to think about the choice of capital structure from the dynamic point of view direction.The dynamic perspective affirms that many companies have a target capital structure,but considering that the target capital structure is constantly changing in a variety of factors and that the cost factor is adjusted in the capital structure,the company often only makes a portion of the target capital structure Adjustment,which led to the actual capital structure and the target capital structure will be a certain deviation.This paper mainly discusses how cash holdings and financing constraints affect the nonlinear adjustment of capital structure.In this paper,the sample data of Shanghai and Shenzhen listed companies from 2005 to 2014 are taken as the research object.From the point of view of financing constraints,the cash holding level is used as the benchmark for the stratification of samples,and the dynamic panel threshold regression method is used to hold cash Level and the degree of financial constraints were stratified rationally.The impact of cash holding level and financing constraint on the non-linear adjustment of capital structure was investigated for the first time.This paper first introduces the background and significance of the topic selection.Then,it summarizes the relevant theoretical and empirical results on the dynamic adjustment of capital structure,cash holding and financing constraints at home and abroad,and describes the research contents,framework and methods of this paper.Thirdly,it expounds the theory of capital structure.Then,it designs the empirical research and uses the measurement software(RStudio)to test the internal influence of cash holding and financing constraints on capital structure adjustment.Finally,the conclusion is summarized on the basis of the previous analysis Make recommendations,while the future research direction to make further prospects.This study found that the level of corporate cash holdings will largely determine the behavior of non-linear adjustment of capital structure.The higher the level of cash holdings,the faster the capital structure is adjusted.The relationship between the different nature of the business is very small,but the relationship between the different levels of debt there will be significant differences: excessive debt and underweight state,the cash holdings and capital structure adjustment rate were positive and Negative relationship;the same time,the higher the level of cash holdings,the greater the degree of capital structure deviation from the target.The relationship between the cash holding level and the capital structure is negative and positive,respectively.The relationship between the cash holding level and the capital structure is negative and positive.In this paper,through the threshold regression model,further study found that the degree of cash holdings on the non-linear adjustment of capital structure will vary depending on the degree of financial constraints,but the positive and negative relationship between them is not subject to financing constraints The difference is changed.This paper is a useful supplement to the theory of cash holding,financing constraints and non-linear adjustment of capital structure.