ME  Vol.3 No.5 , September 2012
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.

Cite this paper
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.
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