Tse, Chin-Bun and Rodgers, Timothy (2014) The capital structure of Chinese listed companies: is manufacturing industry special? Managerial Finance, 40 (5). pp. 469-486. ISSN 0307-4358
MF CS China industry revised (Final) 20-10-2013.pdf - Accepted Version
Download (875kB) | Preview
– The purpose of this paper is to examine whether or not industry membership can explain the leverage of Shanghai listed firms prior to the 2007 financial crisis. In view of the central role that manufacturing industry played in China's rise as a global economic power, the authors are particularly interested in whether or not manufacturing is a special case.
– The paper undertakes a comparative study of leverage differences between manufacturing and non-manufacturing industry firms on both a cross-section and time-series basis. This is supplemented by a pooled regression analysis that models the factors determining leverage on an industry-by-industry basis.
– The authors find that leverage levels differ across industries because of industry-based differences in financial characteristics. It is also found that, despite playing a leading role in China's economic development, there is no evidence to suggest that manufacturing is a special case. Across all sectors borrowing-power-related variables were identified as being important determinants of leverage and, contrary to the expectations, factors relating to profitability were largely insignificant.
– The trade off and pecking order capital structure theories found to be commonly applicable to firms in the western business environment do not appear to adequately explain capital structure in China.
– The paper identify evidence to suggest that China needs to be treated as a “special case” in the context of capital structure theory due to the unique cultural and business environment.
|Additional Information:||© Emerald Group Publishing Limited 2014|
|Uncontrolled Keywords:||Capital structure, Manufacturing industry, Corporate finances, Financing, Chinese listed companies, Cultural factors|
|Subjects:||Social sciences > Economics and economic history
Business and finance
|Depositing User:||Chin-Bun Tse|
|Date Deposited:||14 Feb 2016 02:21|
|Last Modified:||22 Feb 2017 14:26|
Downloads per month over past year
Actions (login required)