Under Heterogeneous Enterprise Capital Structure Optimization And Adjustment Of Viewing Angle

Capital structure usually refers to the ratio between long-term liabilities and equity capital,As the result of which financing method the company choose, The capital structure could beable to decide the property ownership, the distribution of benefits and the appropriate risk theownership should to bear. The company ’s capital structure decision-making is an importantaspect of the company ’s financial decision-making, It is closely related with the company’sgoal--the value of the company to maximize, The significance of the capital structure is thatreasonable arrangements for the proportion of debt capital can reduce the cost of capital rateand obtain the benefits of financial leverage. MM theory(1958) holds that the market value ofany enterprise has nothing to do with its capital structure, in other words, Debt to equity ratioin the right side of the balance sheet is completely free from the impact of the content andstructure of the left assets. However, MM theory has a strict assumption, which has causedmany scholars to expand subsequent research on the basis of the MM theory to get thediscovery of a new capital structure theory. Usually, the main purpose of researching theoryof capital structure is to find the optimal capital structure fitting the current businessdevelopment.As the current business environment is increasingly complex and fraught with uncertainty,The survival and development of enterprises are a growing number of challenges and threats.Studying the impact of Enterprise heterogeneity upon the capital structure in-depth wouldhelp the financial economists and the company managers a clearer understanding of thefinancing taken by the listed companies in China which are facing increasingly complexcapital market. This study also demonstrates that the Western mainstream modern capitalstructure theory is applicable to listed companies in China.This article will be to proceed from the concepts and theories of capital structure firstly,make an analysis and a summarize comment of the development of the theory of capitalstructure and related research, summarize the impact of enterprise heterogeneity upon thecapital structure. In empirical research, this article uses the dynamic panel quarterly data ofChinese listed companies and makes the dynamic optimization of capital structure adjustmentmodel corrected on the basis of the partial adjustment model. This article adopts the SystemGeneral Method of Moment (SYSGMM estimated) to test the factors affecting capitalstructure. The results showed that the capital structure of listed companies in China ispositively correlated with the size, the growth and asset tangibility of the company. In contrast,It is negatively correlated with the profitability of company. These conclusions are consistentwith previous conclusions of the majority of scholars, so that the results of this study havesome explanatory power and significance. This article also elaborates that the capital structureof the listed companies in China exist high adjustment cost. This article has proved that theWestern mainstream modern capital structure theories such as Agency cost theory andSignaling theory and Trade-off theory are applicable to listed companies in China, but the Pecking Order theory is not applicable because of Equity Financing Preference exists inChina.