Analysis of the Effect of Credit Fluctuation on Capital Structure of Listed Companies

Abstract

This paper studies the influence of credit fluctuations on capital structures from the credit supply side perspective. The results, based on an analysis of data from the Listed Companies in China's A share market from 2003-2015, show that there is a positive, significant correlation between credit fluctuations and the capital structure of listed companies. We also determined that the credit policies have affect the capital structure of listed companies. Further research shows that the differences in credit policy environment have different effects on the capital structure of listed companies. Under the stable credit policy environment, the influence of credit fluctuation on the capital structure of listed companies is positive and the coefficient of influence is larger. Under the tight or expanding monetary policy environment, the impact of credit fluctuation on the capital structure of listed companies is negative and the impact coefficient is smaller. Based on this, this paper puts forward the policy recommendations to optimize the capital structure of listed companies.