Chinese Airports Listed Company Capital Structure Research On The Influence Of The Financing Efficiency

Airport is a public infrastructure which is mostly ran by government. The capital it runs on comes from fiscal expenditure and loans from the banks. Meanwhile, airport is capital-intensive, and the massive investment would be a great burden for government if it depends purely on fiscal expenditure. Thus the financing pattern of airport should be diversified. The dominate airport financing modes are fiscal expenditure, FDI, loans from international financial organizations and foreign government and securities, etc.The stock market is an important financial resource which is good for financial diversification and for the change of airport capital structure so as to improve the capital utilization efficiency. By the end of2010, there are157airports all over China,6of which are listed,2of6are in Hong Kong, and happen to be the few profitable airports. How can they maintain profitability while most of others suffer from losses? Is there anything to do with their capital structure besides the factors of location in which airports lie? What are the influences of equity finance and credit finance in the financing pattern on the capital efficiency? According to the capital structure theory, the equity finance and credit finance have different influences on company administration and thus on investment efficiency and market value of the enterprise. In this article, we would refer to the capital structure theory and use the financial data from4listed airport companies in Shanghai and Shenzhen markets, and following questions are considered:At first, we shall give a review of the domestic and foreign research on airport financing based upon relative finance theories and the capital structure theory.Secondly, from the perspective of financing structure and capital operation, we will combine the theory and the data to analyze the factors that affect the efficiency of the listed airport companies financing as a cornerstone for further modeling and empirical analysis.Thirdly, we will choose the relative variables of equity finance, credit finance and company net value to build up a single-equation-model and make test upon the financial data we have on4companies. We want to tell the effects equity finance and credit finance has on investment efficiency and company profitability empirically.At last, we shall propose some advice on financing efficiency improvement with the theoretical and empirical results we have obtained.We find both of the credit finance and equity finance can influence the investment efficiency. And compared with the effect of the financing methods, the method of credit finance is more effective to restrain the manager’s selfish behavior, reduce the agent cost and promote the investment efficiency. But, in the long run, equity finance changes the capital structure and is better for long-term benefit, and then it can improve the whole financing efficiency of listed airport companies. Meanwhile, the phenomenon of "one share dominates exclusively" is very popular among the listed airport companies in China, and there are a lot of the circulation stock shareholders holding a few of shares correspondingly, which lead to weak supervision on large stock holders. The state-owners arrange the investment as they please, and the investment efficiency is held back.