Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies

This paper examines determinants of capital structure of China-Listed companies in Shang Hai Stock Exchange. Profitability, size, growth rate and liquidity are the variables used as the independent variables, while capital structure is proxied by leverage.The capital market of China went through a...

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Main Author:	Cao, Le
Format:	Thesis
Language:	eng eng
Published:	2011
Subjects:	HG Finance
Online Access:	https://etd.uum.edu.my/3254/1/CAO_LE.pdf https://etd.uum.edu.my/3254/2/1.CAO_LE.pdf
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id	my-uum-etd.3254
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Ahmad, Norafifah
topic	HG Finance
spellingShingle	HG Finance Cao, Le Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies
description	This paper examines determinants of capital structure of China-Listed companies in Shang Hai Stock Exchange. Profitability, size, growth rate and liquidity are the variables used as the independent variables, while capital structure is proxied by leverage.The capital market of China went through a remarkable growth from 2006 to 2008, but currently it is in deep recession. This study looks at the factors that influence China's industrial companies' capital structure in a ten-year period, from 1998 to 2010. The findings show that size is positively and significantly correlated to leverage, whilst liquidity is negatively but significantly influences leverage. Both profitability and growth rates do not have any effect on capital structure of the 967 industrial companies examined. The findings also demonstrate that neither the pecking order theory nor trade-off theory derived from the western setting could provide convincing explanation for the capital structure choices of the China's companies. The differences in the choices may be attributed to the fundamental institutional assumptions in the western models that are not valid in China.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Cao, Le
author_facet	Cao, Le
author_sort	Cao, Le
title	Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies
title_short	Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies
title_full	Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies
title_fullStr	Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies
title_full_unstemmed	Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies
title_sort	determinants of capital structure: evidence from china public listed industrial companies
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2011
url	https://etd.uum.edu.my/3254/1/CAO_LE.pdf https://etd.uum.edu.my/3254/2/1.CAO_LE.pdf
_version_	1747827531267964928
spelling	my-uum-etd.32542022-04-13T00:45:50Z Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies 2011-12 Cao, Le Ahmad, Norafifah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HG Finance This paper examines determinants of capital structure of China-Listed companies in Shang Hai Stock Exchange. Profitability, size, growth rate and liquidity are the variables used as the independent variables, while capital structure is proxied by leverage.The capital market of China went through a remarkable growth from 2006 to 2008, but currently it is in deep recession. This study looks at the factors that influence China's industrial companies' capital structure in a ten-year period, from 1998 to 2010. The findings show that size is positively and significantly correlated to leverage, whilst liquidity is negatively but significantly influences leverage. Both profitability and growth rates do not have any effect on capital structure of the 967 industrial companies examined. The findings also demonstrate that neither the pecking order theory nor trade-off theory derived from the western setting could provide convincing explanation for the capital structure choices of the China's companies. The differences in the choices may be attributed to the fundamental institutional assumptions in the western models that are not valid in China. 2011-12 Thesis https://etd.uum.edu.my/3254/ https://etd.uum.edu.my/3254/1/CAO_LE.pdf text eng public https://etd.uum.edu.my/3254/2/1.CAO_LE.pdf text eng public masters masters Universiti Utara Malaysia Abor,J & Biekpe,N. (2009).How do we explain the capital structure of SMEs in sub-Saharan Africa?. Journal of Economic Studies, 36,1, 83-97 Amidu,M. (2007).Determinants of capital structure of bank in Ghana : An empirical approach. Baltic Journal of Management, 2,1, 67-79. Al-Najjar,B. and Taylor,P. (2008). 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Some Evidence from International Data. Journal of Finance, 50,1421-1460. Ramlall,I. (3009).Determinants of Capital Structure Among Non-Quoted Mauritian Firms Under Specificity of Leverage : Looking for a Modified Pecking Order Theory. International Research Journal of Finance and Economics, Issue 31, from : http://www.eurojurnals.com/irjfe_31_07.pdf Reinhard L. & Steven Li (2010). A note on capital structure target adjustment-Indonesian evidence.International Journal of Managerial Finance, 6,3,245-259. Rongrong Zhang,K.R and Yoshio Kanazaki,Y. (2007). Testing static tradeoff against pecking order models of capital structure in Japanese firms. International Journal of Accounting and Information Management, 15,2,24-36. Serrasqueiro,Z.M.S. and Ragao,M.C.R. (2009). Capital structure of listed Portuguese companies: Determinants of debt adjustment . Review of Accounting and Finance, Vol.8, No.1, pp.54-7. Upneja,A. and Dalbor,M. (1999).An examination of leasing policy, tax rates and financial stability in the restaurant industry. Journal of Hospitality & Tourism Research, 23,1, 85-99. Valeriy,S. (2007). Asset Liquidity and Capital Structure. from : http://ssrn.com/abstract=594523 Viviani,J.L. (2008).Capital structure determinants : An empirical study of French companies in the wine industry. International Journal of Wine Business Research, 20,2,171- 104. Zuraidah A. (2009).The Impact of Capital Structure on Firms Operating Performance. College of Business,UUM Sintok,Kedah. James A. Colton and Keith M. Bower (2002).International Society of Six Sigma Professionals, EXTRAOrdinary Sense, 3,2,20-22.

Determinants of Capital Structure: Evidence from China Public Listed Industrial Companies

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