Contrast Study On Capital Structure In Western And Eastern China

The geographical difference of capital structure is the valued topic presently. Foreign scholars, who begin this study in 1990s contrasted capital structure in different countries, found that there was significant difference even though they were all in developed countries or developing countries similarly. The scholars thought that macroscopic features like institutional factors impacted capital structure and maybe caused their difference. Most domestic scholars made descriptive statistics, even if in empirical studies there was little macroscopic features involved. This paper tired to contrast capital structure in western China with eastern China. This empirical study included both microcosmic and macroscopic features which impact capital structure and showed that there is no significant difference in capital structure between western and eastern China. It also showed that their relevant microcosmic factors are almost the same.TAX, GDP.and financial enviorment affect capital structure in different ways in western and eastern China.This paper includes six chapters. Chapter one introduces the background, aim and frame of this study briefly. Chapter two is literature analysis about geographical difference of capital structure and chapter three is about relevant factors. They review the literature on capital structure home and abroad. Chapter four is a brief introduction of western and eastern China, contrasting the two territories in people, economics and other ways. Chapter five is the empirical study of capital structure in western China with eastern China. K-S test and M-W test are used to test if there is significant difference between them, and multiple regression is used to analyze the factors correlated to them. Chapter six is conclusion and limits.