Agency Conflict And Its Impact On Capital Structure

With the development of capital markets, listed companies in China continue to grow. However, by itself, especially the micro-economic characteristics of the enterprises that may exist between stakeholders, the listed companies have emerged in the development of common concern.For a sample of229entrepreneurial enterprises in Shanghai stock market, this paper extends the literature on the determinants of capital structure based on the special characteristics of the entrepreneurial enterprises and the agency theory.Empirical results show that:the proportion of managers holding debt ratio of listed companies with a positive U-relations, that is, in the proportion of managers with low ownership, an increase in the proportion of its holdings, incentives can play a role, thereby reducing its use of debt financing constraints the needs of managers; In contrast, as the proportion of management ownership become high, the debt ratio would be high as well because of the Convergence of interests so that they will do harm to the creditors. Secondly, in view of the size of the proxy conflicts between shareholders, the return results showed that:the degree of concentration of ownership and long-term debt ratio and debt ratio of bank loans is positively related to debt ratio and short-term debt ratio correlated, indicating a major shareholder equity tend to focus on through low-cost financing, weak binding of the commercial credit and a longer period of access to finance debt; degree of checks and balances and various types of equity debt ratio showed a correlation between each other, that is, the more checks and balances between shareholders, the more conducive to corporate debt financing. In addition, we found evidence shows that shareholders and creditors of conflict between the agents of corporate debt financing has a negative impact.The innovation of this paper is mainly reflected in the following areas:Clear that the agency conflict between shareholders and managers, large shareholders and small shareholders and the shareholders and creditors; Find the factors that affect a variety of agency conflicts, such as the proportion of shares managers hold, corporate free cash flow3. Distinguish class of liabilities, the liabilities from the source is divided into bank loans and commercial credit. For period, liabilities is divided into long-term loans and short-term borrowings; various types of agency conflicts.The specific sections of this paper is as follows: The first chapter, Introduction. This chapter listed companies in China to introduce the purpose and motivation of the agency theory.The second chapter, the basis of the theory and literature review. Introduce related theories (including the MM theorey, trade-off theory, asymmetric information theory, agency theory).Chapter3, the research hypothesis and research design. The chapter presents the research hypothesis of this article, that is, we need to verify or test the proposition, and gives the data sources, variable definitions and research methods.Chapter4, empirical results and analysis. Find how agency conflicts affect the capital structure according descriptive statistics and multiple linear regression analysis.Chapter5, Conclusions and weaknesses. Concluding this paper and give recommendations.