Human Capital, Corporate Governance And Optimal Capital Structure

Capital structure theory is one of the foundations of modern corporation financial theory.This thesis first reviews the development of the capital structure theory since 1950's, thenfrom the aspect of control right theory, taking the human capital factor into consideration,discusses the effect that human capital puts on the corporation capital structure. The thesisuses behavioral finance theory to illustrate the important impact that happened tocorporation capital structure theory.This thesis has five parts. The first part reviews the research results of the classicalfinancial theory. The second part takes the economic concept "human capital" intocorporation financial theory, and puts forward the two capital forms: material capital andhuman capital. The thesis divides human capital into two parts: ecumenical human capitaland administer human capital and focuses on the impact that administer human capital putson corporation administration and capital structure. Finally, the thesis discusses threeattributes of the human capital. The third part of the thesis explains two capital structures under two capital forms. Thethesis figures out that the new capital structure should reflect the relationship ofstockholder's capital, creditor's capital and human capital. Human capital, especiallyadminister human capital is the key factor of the capital distribution. The fourth partdiscusses the impact that three attributes of human capital puts on corporationadministration, and how to deal with the conflicts between them. Because the fourth partpoints out the disadvantages of the use of human capital, the fifth part puts forward threemeasures to restrict human capital, they are self restrict, inside restrict and outside restrict.Capital structure theory is one of the most challenge theories in western finance research.The thesis just discusses the effect that human capital forces on capital structure from theaspect of control right theory and behavioral finance theory. Even though there is moreroom for other people to deepen this field.