A Study Of Capital Structure Of Solar Photovoltaic Listed Firms In China

The Capital Structure Theory is one of the most important issue in Financial Economics, but the emperical testing is only limited to some certain areas, such as energy industry, electric industry or small corporate listed firms. This essay is going to talk about the emerging energy, Solar Power Phtovoltaic(PV) listed firms in China, in order to apply the theory into this industry.The essay begins with testing of the Mean-comparing T-testing with Power Solar Power Photovoltaic listed firms and Shanghai 180 index listed firms. As a result, there is signigicant difference between these two groups of data. The mean difference is 6.75%, and double testing significance is 0.005. Then there is an emperical test of the existance of Optimal Capital Structure. The result of this emperical test is positive, that is, there is an Optimal Capital Structure of solar power PV listed firms in China. The theoretical optimal debt-to-asset ratio is 46.15%. Meanwhile, there are some other factors including profitability indicator, asset margin, current ratio as liquidity indicator, revenue growth as business growth indicator. What's more, there are some more factors that affects return-on-asset ratio. These factors includes but not limited to capital market developement level in the macro sense, macro economic factors, corporate management, capital liquidity also play parts in corporate performance. Lastly, it is the estimation about dynamic adjustment coefficient of capital structure of solar power photovoltaic listed firms, and the adjustment coefficient is 85.47%. That means, considering the adjustment cost, they reached 85.47% of the optimal structure.By emperical study, especially in 2008-2010, under the circumstances investigation makes our knowledge of capital structure deep and typical, which build the foundation of adjustment measurement in the future.