Capital Structure of Chinese Listed SMEs: An Agency Theory Perspective

Date

2016-05-02

Advisors

Journal Title

Journal ISSN

ISSN

0921-898X

Volume Title

Publisher

Springer

Type

Article

Peer reviewed

Yes

Abstract

Prior work examining the antecedents of capital structure for small and-medium sized enterprises (SMEs) in emerging markets is limited. This paper sheds some light on how the corporate governance mechanisms adopted by firms on the newly established Growth Enterprise Market (GEM) in China influence their use of debt. We find that the financial leverage of GEM firms is positively influenced by executives’ shareholding and their excess cash compensation. Ownership concentration appears to reduce leverage whereas the percentage of tradable shares increases leverage. Institutional investors’ shareholding does not influence the level of debt. Traditional factors such as tax and operating cashflow are insignificant in explaining the debt levels among GEM firms.

Description

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.

Keywords

Capital Structure, Executive Compensation, Ownership Structure, SMEs

Citation

Huang, W., Boateng, A. and Newman, A. (2016) Capital Structure of Chinese Listed SMEs: An Agency Theory Perspective. Small Business Economics, 47 (2), pp. 535-550

Rights

Research Institute

Finance and Banking Research Group (FiBRe)