The determinants of capital structure and equity financing preference in listed Chinese companies

Xiao, Jason and Zou, Hong 2008. The determinants of capital structure and equity financing preference in listed Chinese companies. Economic Research Journal 6

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Abstract

This paper investigates the share issuing preference conjecture and determinants of capital structure in listed Chinese firms.It provides a method to formally test the share issuing preference and obtained strong evidence that supports the hypothesis.The results indicate that although in general state ownership,legal person ownership and foreign ownership do not have a significant effect on capital structure,a high level of state ownership is associated with a high level of long term debt.These results are inconsistent with the argument in the literature that the high level of state ownership is a cause of the share issuing preference.Additionally,the variables(firm size,asset tangibility,growth and profitability)that are found to be important in developed countries also play a similar role in capital structure decisions in listed Chinese firms.However,they are associated with leverage in ways different from those in other developing counties.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HB Economic Theory H Social Sciences > HG Finance
Uncontrolled Keywords:	Agency Theory; Capital Structure; Financing Behavior; Pecking Order Theory; Static Trade-off Theory
Publisher:	CNKI
ISSN:	1226-4261
Last Modified:	19 Mar 2016 22:39
URI:	https://orca.cardiff.ac.uk/id/eprint/23016

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