外文翻譯-----中國上市公司偏好股權融資非制度性因素（英文）

1、International Journal of Business and Management October, 2009161Chinese Listed Companies Preference to Equity Fund: Non-Systematic Factors Hao Zeng (Corresponding author)School o

2、f Management, South-Central University for Nationalities Wuhan 430074, China E-mail: zenghao1011@163.com Junxia Xu Auditing Department, Wuhan Tongji Hospital Wuhan 430030, China Abstract This article concentrates on the

3、listed companies’financing activities in China, analyses the reasons that why the listed companies prefer to equity fund from the aspect of non-systematic factors by using western financing theories, such as financing

4、cost, types and qualities of the enterprises’assets, profitability, industry factors, shareholding structure factors, level of financial management and society culture, and concludes that the preference to equity fund is

5、 a reasonable choice to the listed companies according to Chinese financing environment. At last, there are some concise suggestions be given to rectify the companies’preference to equity fund.?Keywords: Equity fund, N

6、on-systematic factors, Financial cost 1. Introduction The listed companies in China prefer to equity fund, According to the statistic data showed in , the amount of the listed companies finance in capital market account

7、to 95.87 billions in 1997, among which equity fund take the proportion of 72.5%, and the proportion is 72.6% in 1998 and 72.3% in 1999, on the other hand, the proportion of debt fund to total fund is respective 17.8%,

8、24.9% and 25.1% in those three years. The proportion of equity fund to total fund is lower in the developed capital market than that in China. Take US for example, when American enterprises need to fund in the capital

9、market, they prefer to debt fund than equity fund. The statistic data shows that, from 1970 to 1985, the American enterprises’debt fund financed occupied the 91.7% proportion of outside financing, more than equity fund

10、. Yan Dawu etc. found that, approximately 3/4 of the listed companies preferred to equity fund in China. Many researchers agree upon that the listed companies’outside financing following this order: first one is equity

11、 fund, second one is convertible bond, third one is short-term liabilities, last one is long-term liabilities. Many researchers usually analyze our national listed companies’preference to equity fund with the systematic

12、 factors arising in the reform of our national economy. They thought that it just because of those systematic facts that made the listed companies’financial activities betray to western classical financing theory. For

13、example, the “ picking order”theory claims that when enterprise need fund, they should turn to inside fund (depreciation and retained earnings) first, and then debt fund, and the last choice is equity fund. In this arti

14、cle, the author thinks that it is because of the specific financial environment that activates the enterprises’such preference, and try to interpret the reasons of that preference to equity fund by combination of non-s

15、ystematic factors and western financial theories. 2. Financingl cost of the listed company and preference to equity fund According to western financing theories, capital cost of equity fund is more than capital cost of d

16、ebt fund, thus the enterprise should choose debt fund first, then is the turn to equity fund when it fund outside. We should understand that this conception of “ capital cost”is taken into account by investors, it is s

17、omewhat opportunity cost of the investors, can also be called expected returns. It contains of risk-free rate of returns and risk rate of returns arising from the investors’risk investment. It is different with financin

18、g cost in essence. Financing cost is the cost arising from enterprises’financing activities and using fund, we can call it fund cost. If capital market is efficient, capital cost should equal to International Journal of

19、Business and Management October, 2009163Edison International Company has steady amount of customers and many intangible assets, these supply it with high level of profitability an

20、d ability to gain debt fund, its debt account to 67.2% proportions of its total assets in 1999. Listed companies in developed countries or regions always have high level of profitability. Take US for example, there are

21、many listed companies which have excellent performance in American capital market when do business, such as J.P Morgan, its EPS is $11.16 per share in 1999. Besides it, GM, GE, Coca Cola, IBM, Intel, Microsoft, Dell etc

22、. all always are profitable. In Hong Kong, most of those companies whose stock included in Hang Seng Index have the level of EPS more than 1 HKD, many are more than 2 HKD. Such as Cheung Kong (Holdings) Limited, its EP

23、S is 7.66 HKD. But listed companies do not have such excellent performance in profitability in China inland. Their profitability is common low. Take the performance of 2000 for example, the weighted average EPS of tota

24、l listed companies is only 0.20 Yuan per share, and the weighted average P/B is 2.65 Yuan per share, 8.55 percents of these listed companies have negative profit. With low or no profit, the benefit can be gained from d

25、ebt fund is very little; the listed companies can even suffer from the financial distress caused by debt fund. So with the consideration of shareholders’interest, the listed companies prefer to equity fund when need ou

26、tside financial support in China. 5. Industry factors and preference to equity fund China's industrial organization is during the course of intense changes, that is to say profit margin increase according to the sca

27、les of enterprises. Looked from the financing perspective, large enterprises have more convenient financing conditions and occupy financing advantages in the fierce competitive environment. These competitive advantages

28、may include having more funds for research and development, market development for large enterprises. In this sense, the interaction of industrial organization and financing structures affect the choice of financing pl

29、an. In the competitive sectors, such as household electrical appliance industries, on the one hand, as competition intensifies, profit margins drop more and more low, and lower than the rate of debt fund, if using debt

30、 fund, it is probable to make the enterprise drop into financial difficulties, and income became instable, when facing to risk such as insufficient demand, change of consumer preferences, competition with similar produ

31、cts and technology risks brought by rapid product upgrading. On the other hand, the entry of multinational companies makes technological progress accelerate. The enterprises which want to remain competitive, need to in

32、crease investment in research and development, but Chinese Enterprises’investment in research and development are seriously inadequate. Therefore enterprises need to continue to invest and develop new products, upgrade

33、products and manufacturing processes, increase manufacturing efficiency to reduce costs, gain more market share, and R&D investment is in large quantities, the risk is great. In such a competitive environment, ente

34、rprises in these sectors in order to avoid falling into financial difficulties will inevitably reduce the amount of debt financing. In an industry with intense competition and frequent price war, the current capital str

35、ucture of enterprise will have an impact on the follow-up product market competition. High financial leverage has negative impact significantly on the financial ability to bear the investment capacity of enterprises an

36、d follow-up price war, making the company suffer disadvantages of operating strategy. Enterprises only with high operating efficiency can’ t be ensured to survive. These enterprises with high operational efficiency and

37、 adequate financial resources, that is, enterprises with low financial leverage, will have long-term survival. The current selection of equity financing help enterprises maintain the ability to re-investment when profi

38、tability and cash flow decline, go further, if competitors choose equity financing, enterprises choose debt financing may incited competitors to launch a price war to force enterprises to withdraw from the market. But

39、in monopoly industries, such as utilities, there is no product research and development, upgrading and marketing issues, the risk of revenue came mainly from insufficient demand, rather than competition. Product or serv

40、ice prices are relatively stable, with higher margins and stability, debt financing generally will not lead to financial difficulties. Therefore, these industries can use debt fund to support the development of enterpr

41、ises. To sum up, in different industrial structure and with different financial leverage, the differences of financing of listed companies is very significant. Sector is an important factor to determine the structure o

42、f corporate finance, industry factors or characteristics of industry factors can be a very good explanation of some Chinese listed companies’equity financing preferences actions. 6. Shareholding structure factors and p

43、reference to equity fund Listed companies not only face to external financing environmental impacts, but also the structure of the companies shares. Shareholding structure of Chinese listed companies shows characteristi

44、cs as followed: I. Ownership structure is fairly complex. In addition to the public shares, there are shares held with inland fund and foreign stocks, state-owned shares, legal person shares, and internal employee shar

45、es, transferred allotted shares, A shares, B shares, H shares And N shares, and other distinction. From 1995 to 2003, Chinese companies’outstanding shares of the total equity share almost have no change, even declined

46、slightly. II. There are different prices, dividends, and rights of shares issued by same enterprise. III. The over-concentration of shares. We use the quantity of shares of the three major shareholders who top the list