Equity Financing Regulation and the Optimal Capital Structure: Evidence from China


The “Supply-side effect” on financial management caused by market imperfection has increasingly been concerned. During the transition period, there is strict securities regulation in China’s capital market, which brings the supply-side constraints to corporate financing. Using the data of listed companies those take secondary equity offerings between 1993-2007 in China’s A-share market, the paper examines how the change of regulation policies on SEOs affects cor-porate financing decisions. Our result shows that regulation policy is a significant factor to the amount of refinancing and the optimal capital structure. This result provides important evidence on how the equity regulation environment affects corporate financial management.

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Z. Wang and W. Zhu, "Equity Financing Regulation and the Optimal Capital Structure: Evidence from China," Modern Economy, Vol. 3 No. 5, 2012, pp. 508-517. doi: 10.4236/me.2012.35066.

Conflicts of Interest

The authors declare no conflicts of interest.


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