There is no certainty as to the determinants of capital structure of Chinese companies and we try to investigate the long-term and stable pattern in which China’s public corporations chose capital structure between 1999 to 2005. Employing the unique data,we run regressions by ownership and year,and find that the financial leverage of state-owned listed companies increases with tax rate,and decreases with non-debt tax shield and shares held by the largest shareholder,which suggests that these firms are relatively independent of the government. Furthermore,we also find that it increases with size and tangible assets,and decreases with profitable ability and growth opportunity,and the financial leverage of non-state-owned listed companies decreases only with profitable ability and shares held by the largest shareholder. In general,the empirical results support that the government is not able to control the listed companies effectively. Moreover,we provide some evidence as to balance theory,pecking order theory,and agency theory on capital structure.
展开▼
