Heterogeneity Of Institutional Investors And Dynamic Adjustment Of Capital Structure

In recent years,with the rapid development of dynamic capital structure theory,the research of the dynamic adjustment of capital structure has been the focus in the financial field.According to dynamic balance theory,there is a target capital structure of enterprises in which enterprises can achieve the goal of value maximization.But due to the adjustment cost,the actual capital structure of enterprises will deviate from the target capital structure.An enterprise with the goal of maximizing its value will never let its actual capital structure deviate from the target capital structure for a long time,and will make some adjustments once the benefit of adjustment is larger than cost or there is a large deviation.Therefore,the capital structure of enterprises is dynamic and it will be adjusted again and again to get near to target capital structure.So far,the research on the influencing factors of capital structure dynamic adjustments mainly focuses on enterprises characteristics,institutional environment,macroeconomic conditions.There are few literatures on the influence of dynamic adjustment of capital structure from the perspective of institutional investors.In 2001,The China securities regulatory commission(CSRC)proposed the unconventional development of institutional investors,and from then on,China’s institutional investors have been growing rapidly in quantity and quality,and gradually become an important part of the capital market.Domestic and foreign research shows that institutional investors can participate in corporate governance and influence business decisions.Based on the policy background,this paper selects the financial data of all A shares of non-financial listed companies in China from 2008 to 2017 as the research sample and analyses the influence of the heterogeneity of institutional investors on dynamic adjustment of capital structure theoretically and empirically.The specific contents are as follows:First of all,in general,the institutional investors are significantly positive to the dynamic adjustment of capital structure,which shows that institutional investors can actively participate in corporate governance,improve the level of corporate governance and promote the actual capital structure move toward the target capital structure and achieve the maximization of enterprise value.second,considering the heterogeneity of institutional investors,this paper divides institutional investors in two different ways by using the research of previous scholars for reference: 1)the institutional investors can be divided into pressure-sensitive institutional investors and pressure-resistant institutional investors in the light of whether institutional investors have the potential business relationship with the listed enterprises.The results show that compared to pressure-sensitive institutional investors,pressure-resistant institutional investors can significantly speed up the dynamic adjustment of capital structure.2)The institutional investors can be divided into stable institutional investors and transactional institutional investors according to shareholding ratio and the frequency of transactions and the results show that compared to transactional institutional investors,stable institutional investors can significantly speed up the dynamic adjustment of capital structure.Third,due to the special institutional background of our country,this paper divided the whole sample into two sub-samples,state-owned and non-state-owned in accordance with the property right nature.The regression results show that there is a significant positive correlation between institutional investors’ shareholding and the speed of dynamic adjustment of capital structure in the sample of non-state-owned enterprises,but there is no such correlation in the group of state-owned enterprises.Then,the market competition reflecting the outer environment may influence the relationships between institutional investors and dynamic adjustments of capital structure and regress separately according to Herfindahl index,the regression results show that the shareholding of institutional investors in the high market competition group plays a greater role in promoting the speed of capital structure adjustment.Last,regional factors influence the relationships between institutional investors and dynamic adjustments of capital structure and the regression results show that,compared with the central and western regions,the higher the shareholding ratio of enterprise institutional investors in eastern regions is,the faster the dynamic adjustment of capital structure is.Based on the perspective of heterogeneity of institutional investors,the influence of dynamic adjustment of capital structure has enriched the research of dynamic capital structure and the economic consequences of institutional investors.At the same time,it provides an important reference for regulators to vigorously develop institutional investors and actively guide their healthy development.