A Study On The Reasons And Influence Factors Of Chinese Listed Companies' Equity Financing Preference

Financing preference of a firm not only affects its financing decision but also influences its capital structure, corporate governance and valuation. Researches on this issue have become the frontier of corporate finance in recent years.The academic have been studying about Financing preference, and there are several Financing preference hypotheses. Especially, American academician Myers and Majluf bring forward the Pecking-order hypothesis. This hypothesis assumes a financial hierarchy descending from internal funds, to external debt, and last to external equity. Most empirical test in foreign markets basically verified the model.There is basic difference of financing preference between Chinese firms and western ones. This paper analyses the characteristics of financing preference of Chinese firms under the special institutional environment and the mechanism and factors for forming the characteristics. I also analyses the financing effects and their influences on corporate governance. I hope to provide a new explanation for firm financing patterns in China and give some policy suggestions aiming at formalizing financing behaviors of listed companies and improving financing efficiency in Chinese capital market.Firstly, the article makes a simple introduction to the basic theory of capital structure, and to the relationship between different financing behaviors and corporate governance.Then this article analyses Chinese listed companies by statistics method and find the characteristic of financing preference. That is the listed companies preferred exterior capital, and choose the capitalization capital as the most way. This article also finds the reason of listed companies'financing preference. And the factors influence the characteristic.Finally, the article puts forwards some proposals to rationalize financing behavior of Chinese listed companies, including improving the structure of listed companies and its governance, strengthening the monitoring on information disclosure of listed companies and speeding up the development of corporate bond market in China, etc.