Study On Corporate Govemance And Capital Structure

The research on the theory of modern firm has stepped into the stage of "corporategovernance study". Any oversight in the corporate governance will lead to the fall infirm's efficiency. The reform of state-owned enterprises of China has testified this view.Therefore we think it is critical in firm' reform that improving the corporate governance.The base of corporate governance is the arrangement of multiple property right, so, theimprovement of the corporate governance can achieve only through the identification ofmultiple property right. Though the analysis from theory has its logical necessity, theway of improving corporate governance has more difficulties and need time torecognize in operation. In fact, the improvement of corporate governance can also beacquired through the choice of the capital structure. Capital structure is a form of firm'sproperty right structure that includes the credit. The firm that has the optimal capitalstructure must have the optimal corporate governance. In pursuing the way of how toimprove the corporate governance, theorists and industrialists in China give muchdiscuss on how to identify the property right and carry out the multiple property, butlittle on how to better capital structure and improve corporate governance throughoptimal capital structure. This paper tries to analyze the way of bettering the corporategovernance from the relation between corporate governance and capital structure. Thereare three parts in this paper, that is, introduction, body and conclusion.The introduction points out the significance and angle of study: corporategovernance is the core of state-owned enterprises reform; the improvement of corporategovernance and be achieved through the optical capital structure.The body has three chapters. Chapter 1 discusses the basic theory of firm, which isthe theoretical base of the analyses of the paper. Through contrast between the classicalfirm and modern firm, the paper emphasizes that modern firm aim to assure theshareholders' maximum value and that the perfect firm environment is the indispensableexternal condition to the firm. Then, the paper discusses the meaning and model ofcorporate governance, the definition and essence of capital structure. The maximumvalue of firm. corporate governance and capital structure are closely connected witheach other. Shareholders' maximum value is the object of firm, bettering capitalstructure is the base of maximum value, and the optimal corporate governance is theassurance of maximum value and optimal capital structure.Chapter 3 anaIyzes the current theoretical probIems about the state-ownedenterprises' reform. Both property right theory and super-property right theory stress themeaning of bettering corporate governance from different aspects, and derive differentreform paths, that is, property right reform or bettering market environment. The paperexplains that property right reform and bettering market environmel1t influence eachother and that it will not confOrm to the transfer-economy if we just pay our attention toone aspect. So the paper concludes that it is a good way that property right refOrm andmarket environment better change coordination for the corporate governance better.Bettering capital structure is the crux of tl1e corporate goverl1ance bettel\ because capitaIstructure optimal not only improve the corporate governance flom inside, but also resultin tl1e development correctly of corporate governance from outside.Chapter 4 points out the biggest defect of the capital stn1cture in state-ownedenterprises is the "weak creditor II tl1at loses his control in governance, and falsecontract. While tl1e defect of property right structure is that the shares higlllyconcentrate on tlle state-holder and legal-person holder who are invented holder. So thecritical step in bettering capital structure is to introduce the real creditor in state-ownedenterprises. If having real creditor and re...