Empirical Research of the Impact of Capital Structure on Agency Cost of Chinese Listed Companies

Mengmeng Zheng


This paper, selecting 775 listed companies from Shanghai and Shenzhen stock markets during three years from 2010 to 2012 as samples, studies the relationship between agency cost and capital structure, using two econometrics methods which are ordinary least squares (OLS) and panel data respectively. Capital structure is calculated by debt-to-asset ratio and long-term liability rate while agency cost is measured by overhead expenses rate and asset turnover rate. The result shows agency cost has a slightly negative correlation to debt-to-asset ratio and there is a positive and insignificant correlation relationship between long-term liability rate and agency cost.

Full Text:


DOI: https://doi.org/10.5539/ijef.v5n10p118

Copyright (c)

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)  Email: ijef@ccsenet.org

Copyright © Canadian Center of Science and Education

To make sure that you can receive messages from us, please add the 'ccsenet.org' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.