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On the influencing factors of China's listing Corporation capital structure analysis -- Taking machinery equipment industry as an example

Author: ZhangXiaoHui From: www.yourpaper.net Posted: 2010-07-12 03:01:01 Read:

Abstract: this paper reviews the research situation of domestic and foreign literature on the influence factors of capital structure, summarizes the capital structure of China's listing Corporation, with mechanical equipment instrument industry for example, selected 2006 -- 2007, the deep Shanghai 187 listing Corporation data as the sample, the main influence factor of the capital structure of the regression analysis, results showed that the proportion of state shares, growth, investment and debt levels were positively correlated, firm size, profitability, non-debt tax shield, the capacity to generate internal resources and debt levels are negatively correlated, but the ability to explain differences.
Keywords thesis: listing Corporation; machinery and equipment industry; capital structure; influence factors of

1 the literature review

Review of foreign study on
Since the birth of the MM theory in 1958, western economists have done much research on the capital structure problem from a different angle, obtained great progress.
Taub (1975) by 1960 one one during 1969 89 companies data analysis shows that, the expected return and interest enterprises difference, the uncertainty of future profitability, scale, tax rate, with debt paying ability and the length of time debt equity ratio influence of 6 variables on the capital structure of enterprises.
Titman and Wessels (1958) that the main factors which may affect the capital structure are: (1) the profitability; (2) scale; (3) the value of the secured assets; (4) growth; (5) the non-debt tax shield; (6) variability.
Study of nineteen ninties, with Harris and Raviv; and gRajan and Zingales are the most prominent.Harris and Raviv (1991) shows, the debt ratio and the ratio of fixed assets, non-debt tax shield, investment and development opportunities, the company scale are positively correlated, variability and company (risk), possibility and product advertising spending, bankruptcy particularity negative correlation.
Into the 2l century, study on the influence factors of academic research on capital structure significantly increased, research methods are more diverse, widely used method of mathematical statistics, and the establishment of a variety of research model.In short, the study abroad starts earlier, more comprehensive and in-depth research.
The research of
Professor Lu Zhengfei (1996) studies on the determinants of capital structure on the whole: debt ratio has negative correlations with firm size.Hong Xixi and Shen Yifeng (2000) showed that there was significant effect to choose two factors of enterprise scale and profitability of capital structure, and equity, growth and industry factors have no significant effect on the capital structure of enterprises.Hu Guoliu and Huang Jinggui (2006) was carried out by the use of empirical analysis, stepwise regression results show that, the collateral value of assets, growth, firm size, variability, company age and other factors and the enterprise debt rate has a positive correlation; the non-debt tax shield, profitability and debt rate is negative correlation, in addition, industry effects may also influence the important factor in the selection of corporate capital structure.
The determinants of capital structure of concrete industry some scholars have conducted in-depth study, but this empirical below is from this point of view.Including, An Hongfang and Lu disadvantages (2002) of Shanghai A shares 29 commercial company, Zhang Xiyu (2003) studies on the Shanghai 38 information technology industry listing Corporation, Zhao Linfeng et al. (2003) using multiple linear regression model for empirical analysis of factors affecting capital structure of the listing Corporation in China steel, LAN Gongcheng (2006) of Real Estate Company, Wu Hiroshi (2006) on China's high-tech listing Corporation study etc..
2 China's listing Corporation capital structure of
Different with the western developed countries, China's listing Corporation has a strong preference for equity financing.On the one hand, from the debt financing channels of the lack of equity financing, weak supervision; on the other hand, because of the unreasonable ownership structure, small shareholder rights could not be guaranteed.

It is seen from table 1, the western enterprise financing ways in accordance with the "pecking order theory", namely the endogenous financing first, followed by the issuance of bonds, and equity financing is final.And financing its debt accounted for 70 - 80% of external financing, equity financing only accounts for 20-30%.In comparison, our country enterprise is obviously inclined to equity financing.

As shown in Table 2, the stock financing ratio higher than 80% in most years, which obviously runs counter to the "pecking order theory".

3 for China's machinery listing Corporation capital structure empirical analysis of factors
3.1 sample selection
This paper selects A shares of listing Corporation in the machinery, equipment and instrumentation company 2OO6 in 2007 -- the relevant data, the data source for the database of Tai'an.Considering the influence of abnormal enterprises, empirical data from the ST, PT and *ST company, and puts forward the incomplete data companies, and ultimately selected 187 enterprises.
3.2 variables and the meaning of
3.2.1 explained variable
On the capital structure of the measure, in order to reflect the capital structure of the picture, choose a total of 3 indicators: one is the total debt / total assets, total liabilities of oxygen (YI); two is the current debt / total assets, namely, current liabilities ratio (Y2); three is the long-term debt / total assets, long-term debt ratio (Y3).
3.2.2 explanatory variables and assumptions of
Research on capital structure empirical literature, we consider the company characteristic factors of capital structure includes the following seven:
(1) the ownership structure.Since the state shares and legal person shares can not own circulation, and in the actual Chinese holding company, its behavior is influenced by the government administrative intervention, it likely will have higher debt ratio of state-owned enterprises such as.Therefore, the special equity structure may cause a certain impact on the capital structure of state-owned equity, proportion of the total share capital and debt levels are positively related to.Denote by X1 the ownership structure.
XI= national equity / total equity
(2) the growth of.The amount of capital more strong business growth needs, when the long-term financing capacity is limited, it tends to be financed through short-term debt.Therefore, the enterprises' growth and debt levels are positively related to.Use X2 to represent the growth of enterprises.
X2= (current assets - year total assets total assets) / year
(3) the enterprise scale.The scale of the enterprise and debt levels are positively related to.X3 with the natural logarithm of total assets of the enterprise in this paper, to represent the enterprise scale.
X3=ln (total asset)
(4) the profitability.This paper use X4 to represent profitability.
X4= net profit / the main business income of
(5) the non-debt tax shield.Depreciation can be used as an alternative form of tax advantage of debt, and non-debt tax shields will not produce not due payment risk.Therefore, when the other conditions are the same, have more non-debt tax shields (depreciation) of the company than without the tax shield, less use of debt.In this paper, using the variables X5 to represent non debt tax shield.Due to the depreciation of the difficulty of data obtained directly, as used in this paper is an alternative depreciation, with total assets minus the net assets at the end of alternative.
X5= (total assets of a net asset value of total assets) /
(6) the ability to generate internal resources.According to the pecking order theory, the financing order is: internal resources, debt, the issue of new shares.Therefore, the ability of corporate debt levels should be produced and internal resources is negatively related to.The ability of the enterprise internal resources by using X6.
X6= net cash flow to total assets total /
7) investment.When the company had to finance investment projects, will actively seek and obtain funds.At the same time, the implementation of investment projects will help the company financing, because the implementation of investment projects to enhance the guarantee liability.Therefore, the investment and debt levels are positively related to.In this paper, using the variables X7 to measure the amount of investment.
X7= (the net value of fixed assets, net fixed assets year year depreciation alternatives) / total assets of
3.2.3 capital structure model to explain
In this paper, using the multivariate regression analysis empirical analysis of the above 7 factors which effect the law, so as to provide and how these variables affect the empirical evidence of listed public capital structure.The basic regression equation as follows:
In this paper, using the multivariate regression analysis empirical analysis of the above 7 factors which effect the law, so as to provide and how these variables affect the empirical evidence of listed public capital structure.The basic regression equation as follows:
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