The Study On Determinants Of Financial Structure Of Agricultural Listed Companies

The choice of the financing way of companies has caused concern in economic circles at home and abroad. The optimal financial structure can help managers make rational decisions about loan businesses,can help companies improve operational efficiency. The reasonable financial structure is essential to survival and development of the company. At present,Agricultural Listed Companies have caused public concern. They become the carriers which join the capital market and agricultural industrialization, offer a large amount of fund for the agricultural construction,and have the function of collocating resources rationally. However,in their development process, Agricultural Listed Companies appear many problems,for example,bad business performance,unreasonable asset-liability ratio,unreasonable structure within the debt,which restrict the development of Agricultural Listed Companies seriously. The unreasonable financial structure exerts profound influence on the governance structure of the companies and even restricts the improvement of operational efficiency of the companies. Therefore,the characteristics and determinants of financial structure of Agricultural Listed Companies have become the focus of this article. The main conclusions are as follows:First,we choose Agricultural Listed Companies of stock exchange of Shanghai and Shenzhen from 2004 to 2008 as a sample,and analyze the basic characteristics of financial structure. The results show that the asset-liability ratio of Agricultural Listed Companies is unreasonable;The structure is unreasonable within the debt.Second,we choose 17 variables from firm size,profitability,development capacity,asset structure,non-debt tax shields,liquidity,effective tax ratio,uniqueness of products to study how they affect the choice of financial structure of Agricultural Listed Companies. The results show that the main determinants of financial structure of Agricultural Listed Companies are firm size,profitability,liquidity.Third,the results show that the fixed assets ratio is negatively correlated with the asset-liability ratio. It does not match with the theoretical assumptions. In response to this study,in order to find out the reason,we use stepwise regression again,viewing current-liability ratio and long-term debt ration as explained variables. The paper discovers that the fixed assets ratio is negatively correlated with current-liability ratio,which is contrary to the expected result. But the regression results show that the fixed assets ratio is positively correlated with long-term debt ratio at 5% level,which is consistent with the expected result.