Welcome to free paper download website

An Empirical Analysis of the Factors Influencing Capital Structure of Listed Companies in China

Author: Feng From: www.yourpaper.net Posted: 2009-04-02 17:39:05 Read:
[Abstract] capital structure decisions are the core issues of corporate financing decisions, it directly determines the choice of corporate financing and the proportion of the various financing methods. In this paper, the 2006 Annual Report of 1226 listed companies listed on the Shanghai Stock Exchange as a sample selected may affect a number of indicators of the corporate capital structure to build the index system, principal component analysis and multiple regression analysis, the impact of capital structure of listed companies a major factor in the empirical analysis, trying to provide new empirical evidence for domestic listed companies' capital structure determinants.
[Key words] Factors Influencing Capital Structure principal component analysis multiple regression

With the steady development of China's economic and legal systems, the constant improvement of the environment, the domestic securities market the new changes. Many empirical studies have shown that many of the listed business behavior has similar characteristics with the developed countries, the choice of capital structure than in the past and gradually become more rational and pragmatic, but still there is blindness. The capital structure is not only hot and difficult study of financial theory, is also increasingly becoming the key to the company's financial decisions. In this paper, based on the data of some listed companies in 2006, in considering the data can be observed and availability under the premise of using a variety of statistical methods to analyze the impact of various factors on the capital structure of the enterprise, trying determinants of capital structure for domestic enterprises new empirical research evidence and support for corporate financial decision.
Second, the study design
Research methods
Influencing Factors in the company's capital structure, principal component analysis (Principal Components Analysis) is a common and effective research methods. The principal component analysis is the use of the idea of ??dimension reduction, in little loss of information under the premise of multiple indicators into a composite indicator of multivariate statistical methods. Among the principal component unrelated and consider a few of the main ingredients in the study of complex issues simply will not lose too much information, so the method is easier to grasp the principal contradiction, revealing the transaction internal variables regularity, so that the problem can be simplified to improve the efficiency of the analysis. Based on the above advantages, based on the master data as much as possible a list of indicator variables affect corporate capital structure, and then use principal component analysis to reduce the dimension, to extract the main factors of listed companies' capital structure, and finally with the main component scores of corporate balance than multiple regression analysis to determine the degree of influence of various factors on the company's capital structure.
Domestic capital structure empirical research status quo for: Lufu only through empirical analysis of the relationship between the liabilities rate of listed companies and corporate financing costs, that the significant negative correlation relationship in the long-term financial leverage with the listed company's weighted average capital cost, equity capital costs, However, short-term financial leverage had no significant effect on the cost of capital. Li Shufeng results of empirical analysis of the factors affecting capital structure: nationalization and dividend policy have strong explanatory power of the company's total debt ratio, cash flow and growth of enterprises had no significant effect on the capital structure. Wenzhong bridge using cross-sectional data of listed companies, from the initial evaluation point of comparison and analysis of influencing factors of capital structure of listed companies in China, found that the factors that affect the capital structure of listed companies is not stable, the same factors in different years on capital structure The degree of influence is different. Hong Xixi, Shen Yi peak using the contingency table ranks independence chi-square test to get results showed that: company debt ratio to its size and profitability significantly related, but the impact of the company's equity and growth of two factors on capital structure does not significantly forward. The results showed that in of Feng Genfu, Wulin Jiang's: equity liquidity, profitability and capital structure negatively related to company size is positively correlated with capital structure; growth factors, the value of the collateral and the gearing ratio not. Chen Weiyun, of Underperformance Shenzhen 217 research: corporate capital structure and corporate asset value of the collateral, the interest coverage ratio and the effective tax rate is not relevant; corporate capital structure and corporate profitability, asset realization, asset operational capability negatively correlated.
Draw on existing domestic research tries to propose certain to be tested assumptions:
Assumption 1: industry have a significant impact on the capital structure.
Hypothesis 2: The proportion of non-debt tax shields and capital structure negatively correlated.
Hypothesis 3: company size and capital structure positively correlated.
Hypothesis 4: profitability and capital structure negatively correlated.
Hypothesis 5: a tangible encumbered assets ratio and capital structure positively correlated.
Hypothesis 6: growth and capital structure positively correlated.
Hypothesis 7: solvency and capital structure.
Variable is set
As used herein, the definition and calculation of the variable, as shown in Table 1. Among them, the total debt ratio and current liabilities was explanatory variables, reflecting the capital structure of listed companies. Other indicators as the explanatory variable, reflecting the impact of the capital structure factors.
Sample selection and data sources
Select the Shanghai Stock Exchange market part of the A-share companies as samples. Selection process the following principles: (1) financial listed companies will not be considered, because such a company's capital structure is unique; (2) listed a long life, to ensure that the company's operations is relatively mature; (3) Removal of the ST and PT class companies, the financial position of these companies have been abnormal, or consecutive losses, it will affect the results; (4) Select only the issue of A shares of listed companies, in order to ensure the comparability of the sample data. According to the above principles, select the 1226 listed companies as samples. Data from the 2006 annual report of each listed company.
Third, empirical analysis process and results
A principal component analysis
18 indicator variables selected by the statistical software SPSS principal component analysis, the KMO test result was 0.555, that basically suitable for factor analysis, and the eigenvalues ??of the correlation matrix and the cumulative variance contribution rate. A factor with the correlation coefficient of each variable is often not apparent, it is difficult from the total visually see the meaning of each factor, this needs to be rotated (paper selected varimax rotation method) in order to achieve a variable as far as possible only associated with a factor and a factor depends only on all the variables in a very small number of variables might be related to the conversion coefficient to 0 and 1 poles.
Observe the characteristic value and the cumulative variance # 8 of the main component corresponds to the cumulative variance contribution rate of 69.271%, based on the eigenvalues ??greater than 1, the principle, to select eight main component, and calculate the respective main component score.
Principal components: the main ingredient in earnings per share, return on net assets, return on assets and return on equity rate, a big load, and loads of other variables is small. Variable reflects the profitability of the company, so you can identify the main ingredient for the company to profitability.
Principal components: the principal component in total assets taking the natural logarithm of the main business income from the natural load on the two indicators. These two indicators are used to measure the scale of business, pursuant to which this principal component identified as enterprise scale.
Principal component: the principal component load on the rate of change in the main business income of 0.937, 0.941 load in the main business profit growth, far more than other indicators of load capacity, to judge the main component of enterprises' growth indicators.
Principal components: the principal component, the ratio of shares outstanding load was 0.874, while the stake of the largest shareholder of this indicator load of 0.870, significant compared with other indicators, the principal component is defined as the ownership structure.
Principal component 5: The main ingredient in retained income two main business return on assets and internal maximum load capacity. The two indicators measure service profitability. With principal component can be together as a flag to identify the profitability of the business.
Principal component: the principal component in NDTS a load was significantly greater than other indicators, rather than debt tax shield is an indicator of the tax effect.
Principal components: the principal component load current ratio and interest coverage ratio, these two indicators measure the strength of the firms' solvency, the principal component should be defined as solvency.
The principal component 8: In the main components, tangible assets ratio load capacity of 0.764, which shows the principal component can be used to illustrate the value of asset-backed, pursuant to the definition of the main ingredients is given.
 1/3    1 2 3 Next Last
Please consciously abide by Internet-related policies and regulations.
Tips: Log in to comment, the user name to enter comments directly from your personal space, so that more friends to meet you.

Sponsored Links

Sponsored Links