Capital Structure And Corporate Governance Research

Capital structure is referred to the relationship and structure of the right part of balance sheet. The principal-agent relationship between the shareholders and the management was born with the separation between the ownership and practical control among the modern corporations. And the emergence of debiting the capital caused the contractive relationship between the creditor and corporations. So the capital structure includes the equity structure and liability structure. The equity structure is the basis of corporate governance. It not only determines the allocation of the internal right of the corporations, but also influences the operation of the market of control rights. Liability structure influences the corporate governance through the arrangement of the liability contract and bankruptcy system. According to the developed countries' experience, the arrangement of equity structure and liability structure is very keyful to improve corporate governance. Because China is in the process of economy transferring, many listed corporations come from the state-owned corporations of the planned economy system and have some special characters. The objective of this paper is to find whether such special equity structure and liability structure have influence on the corporate governance or not and how to influence.Base on the theory of capital structure and corporate governance at the beginning of paper, I build the framework to analyse how the capital structure influence the corporate governance. This framework includes the analysis of both equity structure and liability structure. In this framework, I analyse the influence of the equity structure and liability structure of the listed Chinese corporations on governance. What's more, according to the publicly disclosed data of listed corporations, I use positive analysis to test the relationship between the equity structure and corporate governance.