| Summary: | With the development of capital market, there has been more and more
enterprises financing channels, the enterprises capital structure would also
be adjusted. This shows that capital structure of the companies and the
development of capital market are closely related. The number of listed
companies in China's manufacturing companies takes up more than half of
the total number of listed companies. This paper attempts to introduce the
current situation of the capital structure of listed companies in Chinese
manufacturing industry, as well as investigates the elements that affect the
capital structure based on the firm level. Generally speaking, the
conclusions obtained in this research are in line with previous studies.
Growth opportunity, state ownership and firm size are positively connected
with long-term leverage; liquidity and firm size have a positive relationship
with short-term leverage; state ownership, liquidity and firm size are
positively connected with total debt ratio. In contrast, manager
shareholdings negatively relevant to long-term debt ratio; profitability as
well as non-debt tax shields are inversely connected with short-term
leverage and total leverage. This paper first introduces the background and
characteristics of listed companies in Chinese manufacturing industry, then
discusses the theories of capital structure. Moreover, it analyzes the
influencing factors of the company level with the theories of capital
structure. The study chooses manufacturing firms listed on the Shanghai
stock exchanges from 2010-2014, using multiple linear regression methods
to confirm that some firm-level factors have a considerable impact on
capital structure. Finally, according to the empirical conclusion, the paper
puts forward some limitations and provides several suggestions for
optimizing the capital structure.
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