| Summary: | Abstract
This paper discusses the influence of credit ratings near adjustment on corporate capital structure and whether the CR-CS model is more suitable for companies with external financing needs. The data sample contains the credit rating data and financial data of non-financial firms listed on the “ShangHai A share” and “ShenZhen A share” from 2012 to 2017. There are three hypotheses in this paper. The writer firstly focuses on the impact of the credit ratings near adjustment on the companies’ capital structure under broad ratings and micro ratings. Finally, she does tests about whether the external financing needs will influence the extent to which the enterprises are concerned with the credit rating
In general, the writer finds that although the external financing needs will not influence the extent to which the enterprises are concerned with the credit rating, the credit rating still has a significant impact on the capital structure decisions of Chinese enterprises.
Key words: credit ratings, capital structure, ratings near adjustment, external financing needs
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