On Dynamic Partial Adjustment of Corporate Capital Structure: Evidence from Chinese Listed Companies

摘要

The basic divergence of modern capital structure theories is whether corporate capital structure converges to a target capital structure. Chinese listed companies have more characteristics that are different from other foreign firms. So we put forward our research hypotheses by relating various theories to Chinese listed companies'' reality. Based on Chinese listed companies'' panel data and dynamic partial adjustment models, the study finds that from the dimension of company cross section and time series: Chinese listed companies partially adjust their capital structure towards a target capital structure; these companies'' adjustment cost is quietly lower and the adjustment speed is higher; the explain ability of pecking order theory and market timing theory is weak; and the stock price volatility effect on capital structure is temporal, it would be adjusted soon after.