Research On The Corporation Capital Structures And Secondary Market Risk In The Perspective Of Market Microstructure

The mode of corporate financing is the most important part of corporate financetheory, also is the primary problem needed to be addressed in the business process.Different capital structures not only affect the financing costs and the voting rights ofthe shareholders, but also are of great significance for business process andinvestment decisions. The environment of corporate finance determines financingoptions, this article discusses the impact of different risk in stock market on financingcosts for businesses and capital structure choice from the environment of financialmarket, and guide the financing decisions of listed companies combined with China’sbasic situation of financing environment and capital structure theory in order toexplain the status of financing structure of listed companies, and provide investors atheoretical and practical basis for decision-making.The main contents can be divided into four parts:Firstly, we research on the relationship between equity volatility risk andcorporate capital structure. The volatility is decomposed into idiosyncratic volatilityrisk and systematic volatility risk. Based on this, we analyze the impact of these twotypes of risk on capital structure. Using China’s A-share listed companies’ financialdata and transaction data, we explore their impact on capital structure and theadjustment speed capital structure.Secondly, we study on the impact of information risk of stock market on thecapital structure of listed companies. We estimate the information risk based on theEKOP model, then we bring in information risk, the liquidity, the possible financialindicators to test the relationship of these variables and capital structure of the capitalstructure. Furthermore, we divide the sample into five groups to see if there arediscrepancies between the influence coefficient of each group. Above all, we analyzethe relationship of information risk and capital structure.Thirdly, a research on the risk of stock liquidity and behavior of corporatefinancing. In this part, the sensitivity of stock returns to unexpected changes ofliquidity is used as a method to measure the liquidity risk. At first, we analyse theimpact of liquidity risk on leverage of market value and accounts separately from the static and dynamic aspects. Then, we analyse the impact of the risk of stock liquidityon behavior preferences of corporate financing with Probit model.Lastly, the study on capital cost affected by different risk of Chinese Security market. The part employ O’Hanlon and Steele(2000)’s improved residual income growthmethod to measure the capital cost. Then we study the effect of volatility risk,liquidityrisk and information risk on listed company’s capital cost of Chinese security market.