Determinants of Capital Structure Empirical Evidence from Financial Services Listed Firms in China

Thian Cheng Lim


This paper investigates the determinants of capital structure of financial service firms in China. Using a relative regression of accounting data for 36 A-share financial listed companies over the years 2005-2009, an empirical study on determinants of capital structure in financial industry is conducted. The results show that profitability, firm size, non-debt tax shields, earnings volatility and non-circulating shares are significant influence factors in financial sector. Moreover, firm size is positively related to the corporate leverage ratio. It is also found that Chinese institutional characteristic affects the capital choice decision. While it confirmed that capital structure determinant of financial firms are similar to other industry, the largely state ownerships do affect capital structure choices.

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International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)  Email:

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