Business environment and corporate financing decisions: From the perspective of dynamic adjustment of capital structure

Zehao Chen, Yibo Li, Yuyang Lin and Jingrui Pan

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: This paper studied the impact of business environment on enterprise from the view of capital structure dynamic adjustment using the system-GMM. The results showed that a great business environment accelerates the adjusting speed of companies’ capital structure. And the optimization of business environment could relief the financing constraint and reduce the cost of company. Additionally the business environment optimization effect on the speed of capital structure adjustment of non-state-owned enterprises, non-bank-related enterprises, and enterprises with high industry competition. These results show that continuous optimization of the business environment will provide a more “market-oriented and fair” financing environment for Chinese enterprises.

Keywords: Business environment; Dynamic adjustment of capital structure; Financing constraints; Financing cost (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323008334

DOI: 10.1016/j.frl.2023.104461

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