Study On The Relationship Between CFO Influence And Capital Structure Dynamic Adjustment

Early scholars’ researches on the capital structure are mainly based on static capital structure theory,Jalivand and Harris began a new chapter on dynamic capital structure optimization problem in the 1980s.Then,the topic of dynamic adjustment of capital structure has become a hot spot of research at home and abroad.The current study shows that,as the external and internal environment varies,the company will deviate from the target capital structure inevitably in order to meet the needs of corporate development and enhance the value of the company,the decision makers will adjust the capital structure constantly to meet the target level.However,dynamic adjustment of capital structure doesn’t mean the simple adjustment of the corporate debt and equity capital ratio,the adjustment speed and optimal behavior will be affected by the external and internal environment,so it stays in the changeable state.The current studies mainly pay attention to the factors of the capital structure from the perspectives of enterprise characteristics,nature of the industry and the macro environment,which produces fruitful academic achievements.However,these studies ate based on the hypothesis that the managers as homogeneous,ignoring the impact of managers heterogeneity on the dynamic adjustment of capital structure.CFO,as the core person of corporate financial management,optimize capital structure and improve enterprise value is undoubtedly an important part of their work.In the process of corporate development,whether CFO influence could affect the capital structure when facing the complicated financial decision-making environment?Based on the upper echelons theory,Dynamic trade-off theory,principal-agent theory and human capital theory,this paper attempts to explore whether the influence of CFO will have an impact on corporate capital structure decision-making and to further explore whether large shareholders will affect the CFO decision.This paper is divided into five parts.The first part is the introduction,this part elaborates the research background,significance and some related studies at home and abroad.Then it introduces the research ideas,methods and innovation.The second part defines related concepts and introduces some theories including the upper echelon theory,Dynamic trade-off theory,principal-agent theory and human capital theory.The third part is theoretical analysis and research hypothesis,this part reviews the historical evolution of CFO system,analyzes the present situation of capital structure of listed companies in China,deeply discusses the mechanism of the effects of CFO influence on dynamic adjustment of capital structure and put forward the hypothesis of this research.The fourth part is empirical research,using the data of A-share listed companies during 2011-2015,the paper designs variables,create a regression model,put forward the hypotheses through the descriptive statistics,correlation analysis and multiple regression analysis,then further test the effect the ownership structure of CFO on optimizing the capital decision.The fifth part is the conclusion,the results of this study indicate that:(1)CFO,as the top financial administer in the company,its strong forces will have important and positive impact on the capital structure decision-making.(2)CFO influences reflect in the three aspects:organization,profession and reputation,which can speed up the dynamic capital structure adjustment and reduce the degree of deviation of target structure.There is no significant correlation between the influence of ownership of CFO and capital structure decision-making.(3)Only when there is no absolute controlling shareholder,the influence of CFO will have a significant impact on the capital structure decision.This indicates that CFO’s influence on the capital structure decision-making,this suggests that influencing mechanism should be based on several conditions.