Stock Price Crash Risk And Dynamic Adjustments Of Capital Structure

Asset structure and its dynamic adjustment problem have always been the focus of corporate finance research.Dynamic capital structure theory supposes that the enterprise will inevitably deviate from its optimal capital structure influenced by the overall impact of internal and external environment,and the enterprise will adjust the actual capital structure to keep its optimal level in order to adapt to changes in the environment.Based on this,the corporate capital structure is in the process of dynamic cycle of deviation-proximity-reorientation-re-approaching.At present,scholars have discussed the mechanism of dynamic adjustment of capital structure from multiple perspectives.However,the existing research focuses on the macroeconomic environment,institutional factors and the nature of enterprises,and rarely pay attention to how risk,especially the risk of stock price collapse impact on dynamic adjustment of capital structure.Stock market is an essential part of the company’s external environment,the decline in stock price will lead to debt capital costs and equity capital costs rise,affecting the situation of corporate capital structure,and as the extreme price falling,stock price crash may let the company suffer heavy losses.In the face of this extreme phenomenon,rational managers will choose to actively respond to capital structure adjustment in order to avoid the loss of the company to expand.Will the risk of stock price crash have an impact on the dynamic adjustment of capital structure?It has been pointed out that there are differences in the motivation and the urgency of adjusting the capital structure under different debt levels.Are there differences in the correlation between the risk of stock price crash and the dynamic adjustment of capital structure under different debt levels.Based on this,this paper takes the A-share non-financial listed companies in China from 2010 to 2015 as the research sample,and uses the capital structure dynamic adjustment model from the two aspects of capital structure adjustment speed and capital structure deviation degree.By using multiple regression analysis method,this paper empirical researches the impact of stock price crash on the dynamic adjustment of capital structure and further analyzes the differences under different debt levels.The results of this paper show that:(1)there is a significant positive correlation between the risk of stock price collapse and the rate of capital structure adjustment when the other conditions are constant;(2)There is a significant negative correlation between the risk of stock price collapse and the deviation of capital structure when the other conditions are constant;(3)For over-indebted companies,the impact of stock price collapse on capital structure adjustment speed and deviation is more significant.For debt shortage,the impact of stock price collapse on capital structure adjustment speed and deviation is not significant.This article is divided into five chapters.The first chapter is the introduction.This part summarizes the research background,main content and innovation points,and summarizes the domestic and foreign related points on the stock price crash and the dynamic adjustment of capital structure.The second chapter is the theoretical basis.This part defines the concept of stock price collapse risk and dynamic adjustment of capital structure,then sorts out the relevant theories from the modem capital structure system,the new capital structure system,and dynamic capital structure of the three stages.The third chapter summarizes the theoretical analysis and research assumptions.This part makes an introduction of capital structure characteristics of China’s listed companies,and analyzes the relationship between the risk of stock price collapse and the dynamic adjustment of capital structure.The fourth chapter is the empirical analysis.Based on the A-share non-financial listed companies in China in 2010-2015,this part does descriptive statistical analysis,the fitting of the target capital structure,correlation analysis and multiple regression analysis to verify the hypothesis of this article.The fifth chapter summarizes research conclusions and policy recommendations.