||This study discusses the influence of ownership structure on the capital structure of listed company in China. Besides the static models, this study also discusses this subject in the dynamic models.
The relationships between ownership structure and capital structure have been discussed in the developing countries and the developed countries, but the listed company and stock market of China are quite different because the stock market of China develops with the reform of state-owned enterprises. After the state-owned enterprise enters the market, the country still keeps the control over enterprise. In addition, China belongs to the Paradigm shift economic type. The listed companies specially issue the non-tradable stock having the characteristic of China. The tradable stocks are classified into the state-owned share, corporation share of state inside, corporation share of foreign capital, corporation share of collection, staff share and transferable share. The tradable stock is accounted for one-thirds of China‘s market capitalization. Those characteristics of China are different from other countries. And the particular structures will influence the agency cost, and then bring the relationships between ownership structure and the capital structure different from other countries.
Previous studies mainly discuses the influence of growth, firm size, profitability and the percentage of shares held by insiders on the capital structure of listed company in China, but have not considered the influence of state-owned share and corporation share. This study uses the panel regression to precede empirical study and specially classifies the percentage of shares held by insiders, percentage of the state-owned shares and percentage of the corporation share in order to explore the influence of ownership structure on the capital structure in China.
The results of this study find that ownership structure of China listed company is an important determinant in capital structure. There is a positive relationship among the shares held by state-owned, the shares owned by institutional investors, and capital structure. Although there is a negative relationship between the shares held by insiders and capital structure, it’s not significant. Differentiating from the results of expected agency theory, the negative relationship can be explained by specific situations in China. The results also show that the growth, firm size, collateral value of the firm's assets, profitability, and non-debt tax shields are the important determinants of influencing the capital structure of China listed company.