Abstract:

Based on the data of China’s A share listed firms, this paper studies the effect imposed by the separation of control right and ownership and legal environment on the dynamic adjustment of capital structure. The results show that: the lower the level of separation of control right and ownership, the slower the speed of dynamic adjustment of capital structure and the higher the level of capital structure deviation; the better the legal environment, the faster the speed of dynamic adjustment of capital structure and the lower the level of s capital structure deviation; the improvement of the legal environment can significantly alleviate the negative effect imposed by the separation of control right and ownership on the dynamic adjustment of capital structure. Finally, based on the China’s institution background, the research shows that compared with state-owned firms, non-state-owned firms are affected by the separation of control right and ownership and legal environment more significantly.