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Current situation and its impact on the corporate governance of listed companies' capital structure

Author: ZhaoYongMei From: www.yourpaper.net Posted: 2009-11-12 04:13:22 Read:
Summary: Capital structure refers to the composition of its proportion of long-term capital relations. In the sense of property rights, corporate capital structure reflects the main power base of corporate governance, therefore, reasonable capital structure to some extent be able to determine the effectiveness of the business performance and corporate governance. Capital structure of the mechanism of action of the corporate governance structure is not only reflected in equity financing or debt financing on the impact of the corporate governance structure, more important is the ratio of the number of equity financing and debt financing, directly determines the control of the company in the shareholders allocation and transfer with the creditor, resulting in a significant change in the structure of corporate governance.
Keywords: corporate governance of listed companies' capital structure status quo affect

Originally established by the China's capital market services for the restructuring of state-owned enterprises, state-owned enterprises constitute the main body of China's listed companies. Well, the current status of the capital structure of listed companies in China is what? Its impact on corporate governance and how? Explore this paper.

The capital structure of the status quo of China's listed companies

The development of China's securities market late, but its growth rate is relatively fast. By the end of 2004, China's Shenzhen, Shanghai Stock Exchange, the company has reached more than 1,200, the capital market has played an important role in the development of macroeconomic and microeconomic main run. According to the statistics show that in recent years, the overall capital structure of the status quo of China's listed companies.
(A) The gearing ratio of the status quo
Liabilities management is one of the basic characteristics of modern enterprises, the basic principle is to give full play to the role of financial leverage in ensuring the financial health of the company under the premise of seeking to maximize the return on shareholders. Bond financing costs can be exempt from corporate income tax, the the world tax law basically granted interest on bonds in the tax deductibility of the dividend payment is the after-tax. Therefore, corporate debt can be a reasonable tax avoidance, this could make the increase in after-tax profits per share.
On one hand, China's listed companies are generally in the beginning of the listing through divestitures, reducing asset-liability ratio. On the other hand, China's stock market and bond market development imbalance seriously lagging behind the development of the bond market, the corporate bond financing issued relatively high costs and risks, listed companies have a strong preference for equity financing. High debt levels of these two reasons together resulting in China's listed companies. 247 asset-liability ratio of less than 30% in a listed company, the 1999 Annual Report. Some of the company balance rate is incredibly low levels, the lowest debt ratio in 2000 of 20 companies, only 0.91% of the lowest ST entrepreneurs (600,874), the highest Jiangsu Sunshine (600,220) 11.31% .
(B) the liability structure of the status quo
Current liabilities. In theory, enterprise risk preferences to some extent determines its financing decisions. In general, a more moderate attitude is short-term debt to meet the needs of short-term assets, long-term debt to meet the needs of long-term assets. Analysis of long-term trends of the liability structure of listed companies in China, according to the statistics from 1992 to 2000, China listed companies have a high proportion of current liabilities, current liabilities total liabilities ratio is an average of more than 75%, showing the proportion of high-current liabilities characteristics.
High proportion of bank loans and a very small proportion of corporate bond financing. Funding sources of the Chinese enterprises in the 1980s mainly financial gratuitous allocation Bo Gaidai after the implementation of the early 1980s, the only way of corporate external financing bank loans until the end of the 1980s, only the stock and corporate bond financing . In the 1980s, the bank lending requirements of state-owned enterprises is very low, the 1990s strengthened loan collateral requirements, but could not repay the enterprise, with little implementation of the bankruptcy proceedings, soft constraints caused banks on loans to enterprises enterprise high debt ratios. The development of China's bond market, companies issuing bonds to strict control by the government credits, issuance costs and higher risk, bond financing of room for smaller enterprises through bank loans to enterprises and there is a kind of inertia, so companies in the choice of Debt Financing usually the priority bank borrowings. Corporate bonds of listed companies in China in 2002 issued a total of $ 325 billion, but there are 1.85 trillion yuan of bank loans. Since 1986, China's issuance of enterprise bonds, issued a total of more than 3,000 billion yuan, an annual average of just over 200 billion.
(C) the shareholding structure of the status quo
1 non-tradable shares in the share of the total share capital of more than significant. Table 1 lists the tradable shares of listed companies from 1998 to 2002 the proportion of the total share capital. Obviously, real free flow of equity in listed companies in China is only about 35%, although the proportion of non-tradable shares has declined over the years, but not decrease, 65.33% of the total share capital in 2002, still.
A high degree of ownership concentration. Listed companies in China, more than 90% of the company's largest shareholder is the state-owned shareholders, a high proportion of their holdings, in recent years the average stake of about 30% in the proportion of state-owned shares of some companies as much as 50% or even 70-80% or more. "Dominance" has been a major feature of China's capital market. In recent years, the number of state shares "due to the dominance of the company has increased year by year, while the proportion of the downward trend, but the decline was not large,

With private the Background listed companies growing, the founder of the private enterprise "dominance" phenomenon also appeared in large numbers. February 2001, there have been four family shareholding of up to 50% -70% of companies listed. Kangmei Pharmaceutical family shareholding of 66.3%, the largest shareholder of UFIDA Wang Wenjing direct stake to 55.2% indirect stake of 75%; wife Pharmaceutical shareholders Zhu Baoguo and his family stake up to 74.18%, Pan Guang Tong and his son 24.9% of the shares held by Tiantonggufen. The future of GEM listed companies, the shareholding structure will be similar family or private, founder of the "dominance" appeared in large numbers. The highly concentrated ownership structure is undoubtedly a major feature of China's listed companies.
Institutional investors stake. The equity structure of listed companies of the world showing the legal and institutional trends. The proportion of holdings of institutional investors in the United States increased from 14.5% in 1949 to 43% in 1996, the proportion of Japanese corporate shares jumped 66.8% in 1996 from 15.5% in 1949. In 2000, the U.S. institutional shareholding ratio is 44.5%, Japan 72.9%, Germany 64%, compared to the proportion of legal person shares of listed companies in China is low, only 27.58% in 2000, 27.05% in 1999 29.05 percent in 1998.
Senior management stake. Abroad, the senior management of listed companies held by the Company's shares is a common phenomenon, and further expand its stake. As early as in 1980 "Fortune" magazine's Top 500 of the world's largest companies, 371 Board average stake up to 10.6%. The magazine is also found in a survey of 282 medium-sized enterprises in the United States 1985 to 1997 managers pay wage pose an obvious tilt to the stock options, which shows that the stock option incentive mechanism in the developed countries has become a popular form of incentive. However, due to various reasons, the West and its prevailing stock option incentive compensation in the form in China is still in the exploratory stage, the managers did not float or low stake. According to statistics, by the end of 1997 are listed in Shanghai and Shenzhen, and published in the 1997 annual report of all A-share listed companies, only 0.0488% of the average stake of its senior management, Shanghai Rong Investment Consulting Co., Ltd. released 2001 executive stock ownership of listed companies and remuneration conditions Comprehensive Study Report As of the end of April 2001, the chairman of the sample of listed companies published the Annual Report 1088 holdings of 503, accounting for 46.2% (56.69% in 2000 The); holdings, general manager of 385, accounting for 45% (62.13% in 2000), while more than half of the senior management of listed companies do not hold shares of the Company. Therefore, on the whole, the stake of the senior management of listed companies in China is low.


Capital structure of listed companies on corporate governance

(A) the impact of the ownership structure of corporate governance
The shareholding structure of listed companies in China is characterized by high concentration of shareholding, the state-owned shares in a holding position as well as the proportion of the outstanding shares, the paper analyzed from the following three aspects. A high concentration of shareholding, the largest shareholder of serious misappropriation of the company's assets. China's listed companies in 2002, the largest shareholder share of the company more than 50% of the total share capital of 900, accounting for 79.2% of the total number of companies. Therefore, the absolute controlling shareholder (holding more than 50%) are prevalent in China's listed companies.
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