ANALYSIS ON DETERMINANTS OF CAPITAL STRUCTURE ON CHINESE-LISTED COMPANIES

Abstract

This study uses multiple linear regression method to analyze the factors that influence the capital structure of listed construction companies in China. This research firstly summarizes the theoretical achievements of capital structure research in China and the West, and then adopts the method of combining theoretical analysis and empirical analysis after summarizing and analyzing relevant background knowledge. In this research, data of 10 listed companies in the construction industry from 2012 to 2019 are selected as samples. The variables used to determine capital structure in this study are total debt ratio, and the independent variables are profitability, asset tangibility, firm size, growth opportunities, non-debt tax shield, interest rate and inflation rate. Through inferential analysis, the results reveal that non-debt tax shield and interest rate have a significant impact on capital structure. Interest rate is the most significant influence. Finally, this research puts forward relevant suggestions for the optimization of the company's capital structure.