The Study About The Capital Structure Of China's Listed Agribusinesses

The listed agribusinesses are special in China's listed companies, and they are acting as important roles in national economy. However, because of the defective system and poor supervision of the capital market, many agricultural listed companies are only the nominal agribusinesses; they are on the market just to obtain money. In the process of investment and management, they often invest in non-agricultural industries once they came into the market. Currently, it is common that the listed agribusinesses expand their power to non-agricultural field; meanwhile, the use of their financing is inefficiency. It is worried that the main businesses' sustainable development is weak. One of the important reasons is that the capital structure of them is unreasonable, such as, low assets-liabilities ratio, unreasonable debt structure, the predilection for equity financing, complex equity structure and bad liquidity, etc.Since the birth of MM theory, the capital structure theory of corporation has been one of the focuses of the field of economics. According to modern capital structure theory, firms usually raise their finance in pecking order: internal equity financing, debt financing, and then external equity financing. For the special ownership structure (equity financing predilection) of China's listed agribusinesses, they show a totally opposite financing structure with the modern capital structure as a whole, and bring about many problems. For example, there are different pricing mechanisms for two types of equity shares due to the special equity structure of China's listed agribusinesses: The price of tradable shares is determined by the market, while the non-tradable ones is determined by the net assets per share of the company. Different shareholders have different interests, so they seek for different value objectives. At the same time, the state-owned shares have the absolute controlling power, and there is the possibility that the holders of state-owned shares to grasp at the benefits of the listed company with their control power.It is necessary to deal with the problems, which the equity structure, even the capital structure of the listed agribusinesses in China brings about. There are two kinds of factors to influence the capital structure of listed agribusinesses in China's young capital market. The first can be described as micro-level factors, such as non-debt tax shield, growth rate and equity structure, etc. The other can be concluded as economic development, income tax, inflation, and so forth. The thesis adopts to the method of theoretical and empirical analysis, and try to find the train of think and countermeasure of optimizing the capital structure of China's listed agribusinesses, meanwhile, provide a source of reference for their sustainable development.