The Relationship Of Capital Structure And Corporate Governance About The Listed Companies In China

The different capital structure is composed by the different resource of the capital. The capital structure reflects the different relationships of stock holders, the creditor, the related subjects and the corporate. Early capital structure research mainly described the relationship between capital structure and corporate value or market performance, lacking strict theoretical deduction and empirical test. Although modern capital structure theory has a strict logic, its primary research subject is the impacts on capital structure and corporate value caused by firm's external factors as tax and bankrupt cost, etc. And post-modern capital structure theory introduces institutional arrangement of corporate governance to the study of the capital structure, which has advanced the issue of capital structure research to a new stage. The corporate governance is very important to the corporate development. Different governance structure influences the capital structure differently. The appropriate corporate governance structure can optimize the capital structure; the appropriate capital structure can ameliorate the corporate governance structure, and increase the efficiency of the corporate governance.Recently, there are lots of deficiencies in the capital structure and the corporate governance about the listed companies in China which made the performance of the corporate governance is discontented. In order to constructing the optimal capital structure, constructing the best corporate governance, maximizing the corporate value, the first thing we should do is to find out the inner relationship of the capital structure and the corporate governance. Then increasing the efficiency in corporate performance, promote the progress of the modern enterprises reformation smoothly from the two aspects-optimize the capital structure and corporate governance.This paper discussed about the correlation ship of capital structure and corporate governance about the Listed Companies in China following the paces of development of capital structure theory, absorbing others' experience and lessons and using empirical research as the main method.This paper discussed how the capital structure influences the corporate governance structure from the 2 aspects- equity financing & liability financing. It is considered that the ownership capital influence the corporate governance on the arrangement of the corporate governance structure. The ownership structure decides the monitoring mechenism, the efficiency of the directorate and the board of supervisors, and the arrangement of the manager layers. The liability capital will decide the stimulation of the manager and the constraint mechanism.When do the research of how the corporate governance structure influence the type of capital structure, the paper selected the data from the year 2003 to 2005 annual reports about 1000 listed companies as the sample. After using the empirical analysis method to discuss the correlation ship of the capital structure and the corporate governance structure, we found that the high level of the governance, the stricter supervise to the manager, the more restrictions to the majority stockholder, the high debt the corporate used.On the basis of those two aspects, lots of the constructive suggestions are proposed in the end of the paper.