Capital structure of Chinese listed SMEs: an agency theory perspective

Huang, Wei, Boateng, Agyenim and Newman, Alexander (2016) Capital structure of Chinese listed SMEs: an agency theory perspective. Small Business Economics, 47 (2). pp. 535-550. ISSN 0921-898X

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Prior work examining the antecedents of capital structure for small and medium-sized enterprises in emerging markets is limited. This paper sheds 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. In contrast, institutional investors’ shareholding does not influence the level of debt. Traditional factors such as tax and operating cash flow are insignificant in explaining the debt levels among GEM firms.

Item Type: Article
Keywords: Capital structure; Executive compensation; Ownership structure; SMEs China
Schools/Departments: University of Nottingham Ningbo China > Faculty of Business > Nottingham University Business School China
Identification Number:
Depositing User: QIU, Lulu
Date Deposited: 29 Jun 2018 08:22
Last Modified: 04 May 2020 18:05

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