| China’s listed companies have equity financing preferences,and this phenomenon is difficult to effectively explain through the Western tradition of "internal financing-debt financing-equity financing" for the priority financing theory.In recent years,market timing theory has prospered.Companies often choose financing opportunities based on changes in capital market conditions,issue stocks when stock markets are overvalued,and issue bonds or buy back stocks when undervalued.The capital structure of a company is the cumulative result of managers’ past financing activities based on market timing.This kind of behavior corporate finance believes that corporate managers are rational,investors are irrational and often misclassify corporate values,so that companies have the best financing opportunities.But how does the company use this irrational behavior of investors? This paper intends to empirically compare the relationship between equity dilution,debt dilution and stock financing,and bond financing of Chinese and American listed companies.Then I use dilution to measure market timing and explore the market timing behavior of Chinese and US listed companies financing under different capital market conditions and their impact on capital structure.This article specifically includes five chapters.The first chapter is the introduction.Firstly,the research background of this paper is introduced.Then the significance of this paper is expounded.In addition,the research ideas and research framework of this paper and the innovation of this paper are introduced.The second chapter is the theoretical basis and related literature review,respectively,to sort out the relevant literature on market timing theory and dilution effect.Firstly,the related concepts of market timing behavior theory,domestic and foreign research literature and research progress are introduced.Then the related concepts of dilution effect and research literature at home and abroad are introduced.The dilution effect is divided into equity dilution and debt dilution..The third chapter is the research design.Firstly,the research sample and data source are introduced.Then the theoretical analysis of the relationship between dilution and market timing of equities and debts issuance is carried out theoretically and logically.Then the hypotheses and models of this paper are introduced,the hypothesis content of this paper is explained one by one,and the research model is formed.Finally,the variables definitions and descriptions are carried out and then the dependent variables,independent variables and control variables introduced respectively.The fourth chapter is the empirical analysis.Firstly,the divergence effect of the research is analyzed.The market timing is analyzed according to the performance of the chart.Then the descriptive statistical analysis is carried out,and then the correlation of each variable is carried out.Finally,the regression analysis of the data of listed companies in China and the United States was carried out to test the relevant assumptions.The fifth chapter is the conclusion and suggestion.Firstly,it introduces the conclusions of this paper,and then introduces the practical significance and contribution of this research.Finally,it summarizes the shortcomings of this paper.Through the research of this paper,the following important conclusions are drawn: 1.Through the analysis of the trend of equity dilution and debt dilution in the US and China,this paper finds that US listed companies will use the equity dilution window when issuing new shares;Use the low-density release window of debt dilution.That is to say,there is market timing behavior in the external financing of listed companies in the United States.Chinese listed companies will use the peak window of equity dilution when issuing new shares,and choose to issue new shares when the stocks are diluted.Chinese listed companies have market timing behavior in stock financing,but not when issuing bonds.2.Through the empirical analysis of US stock and bond market data,this paper finds that the dilution of stocks in US listed companies is negatively correlated with stock issuance,which is positively related to bond issuance;the dilution of US listed companies’ debts is positively related to stock issuance and negatively related to debt issuance.US listed companies tend to issue bonds when stocks are diluted and avoid issuing stocks.When stocks are diluted,they tend to issue stocks and avoid issuing debts.Similarly,when debts are diluted,companies tend to issue stocks and avoid issuing debts.When debts are diluted,they tend to issue debts instead of stocks.3.Through empirical analysis of China’s stock and bond market data,this paper finds that China’s listed equity dilution is positively related to stock issuance and positively related to bond issuance;China’s listed company debt dilution is negatively related to debts issuance,debt dilution and stock issuance are not significant correlation.Chinese listed companies tend to issue debts while issuing stocks,which is a distinct departure from US listed companies.4.There is a significant correlation between the capital structure of listed companies and equity dilution and debt dilution.US equity dilution was significantly negatively correlated with asset-liability ratio,and debt dilution was not significantly correlated with asset-liability ratio.Equity dilution of Chinese listed companies is significantly negatively correlated with asset-liability ratio,while debt dilution is significantly positively correlated with asset-liability ratio.5.The market timing formed by the dilution effect has a long-term impact on the capital structure of listed companies.Specifically: the market timing of equity dilution can affect the long-term capital structure of listed companies,while debt dilution cannot. |
