Institutional Environment,Separation Of Two Powers And Choice Of Capital Structure

In recent years,a large number of studies have shown that the majority of countries are concentrated or relatively concentrated,and generally there is the ultimate controlling shareholder.The ultimate controlling shareholder often use the pyramid structure,cross-shareholding and double shares to result in a smaller cash flow rights to obtain greater control,It's the formation of another form of "separation of the two powers." This separation of power is an important feature of the world stock ownership structure,it will inevitably affect the company's capital structure decision-making.In addition,the company is always in a certain institutional environment,the institutional environment can affect the motivations of market participants,and thus affect their behavior decision-making.China's capital market establishment time is short,the degree of market is low,the investor legal protection system is constantly improving,the government intervention is high,the overall institutional environment is not optimistic.However,over the years,China has continuously advanced the process of marketization,and the 18th National Congress has been stressed that "rule of law",indicating that China's institutional environment will be placed in an extremely important position.Therefore,it is of great significance to study the relationship between institutional environment,separation of powers and capital structure selection.Based on the realistic background of the existence of large institutional environment differences in China,this paper analyzes the institutional environment,the separation of power and the capital structure from the control of the ultimate controlling shareholder's control and the separation of the cash flow rights.Based on this,the hypotheses of this paper are put forward.In the empirical research part,this paper chooses all the listed companies in Shanghai and Shenzhen 2008-2014 as the research samples,construct the multiple regression model,test how the separation of the two powers affect the capital structure,and according to the nature of the sub-group for further testing.While examining how the institutional environment affects the relationship between the separation of the two powers and the choice of capital structure.The study found that in order to avoid the dilution of control and the addition of more encroachable corporate resources,the separation of control and cash flow rights is positively related to the level of debt.Due to state-owned companies and the government has a natural kinship,compared to non-state-owned companies are more easier to be financed by debt,The positive relationship between the separation of the two powers and the level of the debt is stronger.Further,the institutional environment is incorporated into the study and found that the improvement of the institutional environment that the degree of marketization,the level of the rule of law to improve the reduction of government intervention can suppress the separation of the two rights to the positive impact on debt levels.The improvement of the institutional environment includes the degree of marketization,the improvement of the rule of law and the reduction of the degree of government intervention can suppress the positive impact of the separation of the two rights on the debt level.