Research On The Relationship Between Regional Vitality And Capital Structure

Capital structure has been a hot topic in both theory field and practice field.Under the background that China is in the period of economic transition,the capital structure of Chinese listed companies is affected by both external environment and internal factors.There are great differences in the level of economic development and social environment among different regions in China,and these differences brought about the diversity in financing preferences and financing options,which leads to the differences in the capital structure of enterprises in different regions.Up to now,there is limited research on this issue in China.Therefore,it is particularly important to analyze the impact of geographical vibrancy on the capital structure of listed companies in China against the background of regional differences.Based on this,this dissertation studies how geographical vibrancy affects the corporate capital structure decisions in China by using the data of listed A-share enterprises(except financial enterprises)from Year 2013 to 2017.This dissertation finds that geographical vibrancy significantly affects the capital structure,and when geographical vibrancy increases,companies tend to reduce their leverage ratio.In addition,considering the term of liabilities,this dissertation divides the debt asset ratio into short-term debt asset ratio and long-term debt asset ratio,and the results show that geographical vibrancy is significantly correlated ·ith the short-term debt asset ratio.Then this dissertation extends the base regression model.In the first extended model,this dissertation adds the interaction term with vibrancy index and company size,and the results show that compared with large-size companies,geographical vibrancy has a more significant impact on the capital structure of small-size companies.In the second extended model,this dissertation adds the interaction term with vibrancy index and profitability,and the results show that compared with low-profitability companies,geographical vibrancy has a more significant impact on the capital structure of high-profitability companies.Then this dissertation tests the correlation between geographical vibrancy and the speed of capital structure adjustment,and find that geographical vibrancy would mainly affect the speed of short-term capital structure adjustment of the company.The higher the geographical vibrancy is,the faster the short-term capital structure adjustlent will be.At last,this dissertation proves the positive correlation between the capital structure of companies in the same region,and the peer effect is more significant in regions with low vibrancy.In order to further examine the accuracy of the empirical results,this dissertation uses with-interest property debt rate instead of total debt asset ratio,and whether the company is located in the center city instead of vibrancy to conduct robustness test.And then this dissertation uses the shortest distance between the company and the center city as a tool to conduct endogeneity.The results prove that the research conclusion of this dissertation is reliable to some extent.Finally,this dissertation puts forward suggestions based on the research results.The government should pay attention to the construction of external market,expand financing channels and enhance geographical vibrancy.And enterprises should optimize their capita]structure decisions accordingly and take advantages of the region.