The Analysis Of Capital Structure And Effect Of Corporate Governance Of China's Listed Companies

It has been known that capital structure of company has certain governance effect .In China, for reformed from the state-owned enterprise, most listed companies have very special capital structure. How about the financing ability and efficiency under such capital structure? Based on definition of capital structure and corporate governance and the relationship between them, This paper analyzed emphatically that the causes of such capital structure and the reasons to weaken the governance effect of capital structure. This paper raised the point of view: if we want to improve the current situation of capital structure of the listed companies, we should perfect the corporate governance of the listed companies. However the perfection of the corporate governance depends on the capital structure itself. That is to say that we should regard optimization of capital structure as the starting point and perfection of the corporate governance as the core, and set up the benign cycle between capital structure and corporate governance. In the end this paper put forward several relevant suggestions.The first part is the preface .It gave some simple introduction of research fruits of capital structure and corporate governance. The roughly frame and some policy suggestion.The second part is the starting of this paper. The definition of capital structure and corporate governance and the relationship between them. The capital structure is not merely a choice of financing agreement, but more important is the disposition of balance mechanism that is constructed by the property right behind fund. The different choice of capital structure is the different choice of governance mechanism of company. Then discussed the financing effect under two different kinds of financing ways: equity financing and credit financing. Then analyzed the shareholder-led model corporate governance in UK and USA, creditor-led model corporate governance in Germany and Japan.The third part explained the current situation about capital structure of the listed companies in China. They demonstrates the following characteristics obviously:(l)The inside financing is far below than the outside financing; (2) The proportion of stock financing is higher than bond financing in the outside financing;(3) The equity structure is unreasonable;(4) For the level of the current liability is so high, the debt structure is unreasonable also;(5)Take the ration chares as the main resource of long-term capital. We can draw a conclusion: listed companies have a partiality for3equity financing .The fact fail to agree with western financing theory ( Peckling order) in developed countries. The signal transmit effect of financing structure is not exist in our country. Equity financing is the cheapest financing way. This paper also drew a conclusion from an empirical research that both equity structure and senior administrator shareholding ratio are little influence on financing. Finally analyze the performance of the listed companies in recent years. The data show: the performance is less than satisfactory.Then analyzed the causes of the current capital structure. The theory of capital structure think: financing is influenced by several factors: such as financing cost financing tools, corporate control and external environmental factors. The key of the problem is that institutional deficiency not raising fund.The fourth part analyzed the reasons that weaken the governance effect of the financing structure further in the point of governance system. The basic reason is that normal governance structure has not been set up inside and governance function is lacked outside. The bank and the stock market are the mainly two administrators who carry out governance duty outside the enterprise. The abnormality of Governance function is originated from the dual character of share that is caused by the dual character of the equity structure. The state-run banks are far from the real commercial bank .the debt reflects the debt-credit relationship among different units under th...