An Empirical Test of the Relationship of Stock Market Status and Industry Classification to Capital Structure in Taiwan --The Public Company Evidence

• Main Authors: Echo C. H. Lai, 賴瓊華
• Other Authors: Chyan Yang
• Format: Others
• Language: zh-TW
• Published: 1999
• Online Access: http://ndltd.ncl.edu.tw/handle/38728211046834536869

碩士 === 國立交通大學 === 經營管理研究所 === 87 === This research is to empirically verify the capital structure theories with the historical financial data of the public companies in Taiwan. The sample consists of 326 companies covering 17 industries for the years 1986-96. Three main subjects and their results are enumerated as follows. 1. The impact of stock market status on capital structure. (i)The empirical result reveals that stock market status is negatively related to capital structure. The influence of last year’s stock market status is the most significant one on current year’s capital structure comparing to that of the year before last year and current year. This implies that there is a one-year lagging effect exists. (ii)The stock market influence varies across industries. 2. Different industries demand different capital structure (i) The empirical results reveal that capital structures vary significantly across industries whereas their risks do not. Therefore, this research does not support that the variations of capital structure across industries is caused by different risks of industries. (ii) There seems to exist an optimal capital structure range in each industry. The range is convergent to industrial average. 3. The relationships between capital structure and other determinants. It is shown that company size, growth rate and collateral value of asset are positively related to capital structure. However, profitability, dividend rate and nondebt tax shelters are negatively related to capital structure. Relationships of capital structure to these determinants do conform theories of capital structure.