| The issue of capital structure has always been one of an important topic in the field of financial research.The choice of capital structure not only influences financing cost and market value of listed companies,but also has close relations with corporate governance structure and manager’s behavior.Previous research on capital structure theory has experienced the evolution of which from the static theory of capital structure gradually to the dynamic capital structure theory.According to the dynamic capital structure theory,there is optimal capital structure for each company which influenced by various factors.But due to the occurrence of random events and the existence of adjustment cost,the actual capital structure tend to deviate from the optimal capital structure.The dynamic adjustment of corporate capital structure means constantly adjust the capital structure dynamically based on the changes of internal and external surroundings of per enterprise to ensure the safety of enterprise property and realize the maximization of enterprise value.As the very important external surroundings which per company faces,High level of regional financial development means more financial institutions,external financing channels,ideal loan security system,and lower degree of asymmetric information,transaction cost.In this case,enterprises are easier to get all kinds of external funding for the adjustment of capital structure when they deviate from their best level.Besides,high level of regional financial development also means that the government reduce administrative intervention.The decrease of institutional restrictions enable the company operate on its own and because of this its speed of adjustment will be sooner.On the contrary,when the regional financial development level is not high,the external financing environment is bad,financing cost is high.And it leads to that adjustment cost is greater than the benefits,and speed adjustment slow down.That is to say,the level of regional financial development will ultimately affect the enterprise’s capital structure adjustment speeds via influencing the adjustment cost.Meanwhile,since the cost of debt capital refers to the enterprise the cost of borrowing and issuing bonds,which including interest and financing cost.So when the enterprise increase or reduce debt to adjust its capital structure,it will consider the influence of the existing and potential debt capital cost.Theoretically there is no unified conclusion.On the one hand,because the cost of debt capital itself is part of the costs of the adjustment,some scholars think the debt capital cost will reduce the speed of the capital structure;But on the other hand,the enterprise with high debt capital cost need to pay large interest expense at regular intervals.The tax deductibility effect is obvious,but But the bankruptcy risk of the enterprise also increased obviously.It not only can make the enterprise confront with commercial bank’s credit discrimination when refinance,may also lead to the loss of the enterprise value.Adjust leverage at this moment,will make the adjustment income greater than the cost,and increase enterprise value.The debt capital cost will be the incentive to stimulate the adjustment of enterprise capital structure,and increase the speed of adjustment.Along the path of the logic analysis,we can not help thinking that,in the perspective of regional financial level,is there a difference between the influence of the cost of debt capital on capital structure adjustment speed in view of different regions with different financial level?In theory,in the region with high level of regional financial development,government intervention that company faces is reduced,and it can run the business on its own.Therefore the business operators could pay more attention to their own risk the change of the enterprise value,and the adjustment of capital structure.Flexibility of capital structure also can be enhanced;Meanwhile,due to the superior external financing environment,increasing financing channels and financing method,and the and lower degree of information asymmetry,when a company decides to adjust its capital structure,it will thinks more of the influence of the debt capital cost than before.However,in the region with low level of regional financial development,the opposite is true.Enterprises suffer from intense external financing constraints.Whether the enterprise adjusts its capital structure or not does not depends on their own will,but on whether the enterprise has the ability to obtain exogenous financing.At this point,debt capital cost no longer be a prominent concern,and the manager will pay more attention to the capital size that can be achieved.In view of the above three questions,this article has get 798 company’s financial data in 2004—2013,and all the company is listed on the A-share main board;then collect the panel data of time span of 10 years,establish a panel data model according to the dynamic capital structure theoretical ideas.In this paper we use the system GMM estimation method to estimate the dynamic adjustment model three times.First,this paper discusses the relationship between the regional financial development level and the adjustment speed.The results showed that the level of financial development will have a beneficial effect on capital structure adjustment speed.The second time,this paper verifies the effect of the cost of debt capital on the adjusting speed.The empirical results show that the debt capital cost and adjusting speed are positively correlated,namely,the cost of debt capital is the incentive rather than the resistance of adjusting speed.Third,this paper discusses the combined effect of regional financial development level and the debt capital cost to adjusting speed.The empirical results show that there is significant difference between the influences of the cost of debt capital on capital structure adjustment speed in view of different regions with different financial level.The higher the level of regional financial development,the effect more significantly;on the contrary,the less significant.Finally,on the basis of theoretical and empirical analysis,taking optimizing business capital structure,improving the enterprise capital structure adjustment speed and maximizing the enterprise value into consideration,the following Suggestions are put forward:(1)the enterprises should have the consciousness of the capital structure and maintain a flexible capital structure;(2)the enterprise should have a clear picture of internal external environment;(3)the government should enhance the support of the central and western regions;(4)the government need to speed up the construction of perfecting our country’s financial markets. |
