Cited By
View all- Yakubu IOumarou S(2023)Boardroom dynamics: The power of board composition and gender diversity in shaping capital structureCogent Business & Management10.1080/23311975.2023.223683610:2Online publication date: 20-Jul-2023
The Effect of Profitability on Capital Structure in China
Authors: 
Shitian Li, Junying WangAuthors Info & Claims
Pages 159 - 163
Abstract
Corporate capital structure is an essential determinant of company's financial risk and performance. Due to global economy and country development, the lack of governance and theoretical support in China will be a hindrance to the development of Chinese capital market. Therefore, it is necessary to study the main factors that influence corporate capital structure. Among the factors, profitability is a significant one because it is an indicator of firm's operating performance and growth opportunity. The pecking order theory and the trade-off theory are two main theories that explain the effects of profitability on capital structure. This article conducts empirical research based on the data collected from 2016 to 2020 in China A-stock market. The regression results suggest a negative relationship between profitability and capital structure, which is consistent with the prediction of pecking order theory. According to the results and theory, better guidance can be provided for Chinese capital market.
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Published In
September 2021
411 pages
ISBN:9781450390644
DOI:10.1145/3494583
Copyright © 2021 ACM.
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Published: 09 January 2022
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ICIBE 2021
ICIBE 2021: 2021 the 7th International Conference on Industrial and Business Engineering
September 27 - 29, 2021
Macau, China
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View all- Yakubu IOumarou S(2023)Boardroom dynamics: The power of board composition and gender diversity in shaping capital structureCogent Business & Management10.1080/23311975.2023.223683610:2Online publication date: 20-Jul-2023
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