The Study Of Influence Factors On The Leverage Rate Of Chinese Manufacturing Industry

Chinese economy has embarked on a new normal of middle-high rategrowth,and the manufacturing industry has suffered over-capacity,high leverage and other issues in course of its development.The development of manufacturing industry is closely related to the destiny of a nation.Based on the trend of “deleveraging” proposed by the Central Communist Party,the purpose of this paper is to identify the factors that influence the leverage rate in manufacturing industry and work out the best ways to control and mitigate it through the analysis of its current condition.This paper would reveal the ten indexes that reflect the leverage rate from the perspective of macro-environment,corporate features and corporate management.This paper selects 514 manufacturing industry companies as samples.Then,it would select the data of 2007 to 2015 and set up an individual fixed effect model of leverage to evaluate the impacts of these factors.This paper finally came up with the following conclusions.Firstly,there are huge differences in the leverage rares in manufacturing industry,and companies in this industry are uncompetitive and poorly profitable.Secondly,No matter to the whole companies or the abnormal company,the inflation rate,the scale of a company and the profitability are all their influence factors,and affect deeper in the companies with higher leverage rate.The abnormal company was 1.89 times?1.26 times? 3.03 times to the total.When the inflation rate is higher than the previous year,the leverage ratio of total sample corporate and abnormal companies fell respectively by 0.889 percentage points?1.682 percentage points;The scale of a company increased by a unit,and leverage ratio rising respectively by 3.143 percentage points?3.964 percentage points;Profitability increased by one percentage point and leverage ratio fell respectively by 0.229 percentage points?0.694 percentage points.Thirdly,except for the common influence of the secondly,the whole companies and the abnormal company have differences.For the whole company,when monetary policy is tighter than last year,the leverage ratio rising by 2.146 percentage points;Non-debt tax shields increased by one percentage point and leverage ratio fell by 1.316 percentage points;The guaranteed value of assets increased by one percentage point,and leverage ratio rising 0.273 percentage points.While for the abnormal company,when the asset liquidity increased by a unit,and leverage ratio fell by 8.745 percentage points;Ownership concentration increased by one percentage point,and leverage ratio rising 0.250 percentage points.The innovation of this paper is to have selected the the latest data and the topic is practical.Therefore,it have not removed the companies with high leverage rates in the study but examined it individually.Third,it have also referred to panel models in the empirical analysis that can fully reflect the factors influencing corporate leverage.But also,this paper has its own weaknesses such as the research sample was not very popular.Secondly,lacking of creativeness in selecting indexes,it mainly refer to the existing indexes put forward by previous studies,the chosen indicators may not be comprehensive enough.Moreover,the empirical study we conducted needs further examination and reflection in the future.