The determinants of capital structure: Evidence from China

Guihai Huang, Frank M. Song

Research output: Contribution to journalArticlepeer-review

386 Citations (Scopus)


This paper employs a new database containing the market and accounting data (from 1994 to 2003) from more than 1200 Chinese-listed companies to document their capital structure characteristics. As in other countries, leverage in Chinese firms increases with firm size and fixed assets, and decreases with profitability, non-debt tax shields, growth opportunity, managerial shareholdings and correlates with industries. We also find that state ownership or institutional ownership has no significant impact on capital structure and Chinese companies consider tax effect in long-term debt financing. Different from those in other countries, Chinese firms tend to have much lower long-term debt.

Original languageEnglish
Pages (from-to)14-36
Number of pages23
JournalChina Economic Review
Issue number1
Publication statusPublished - 2006
Externally publishedYes


  • Capital structure
  • China capital market
  • State owned enterprises
  • Tax effect


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