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| Research on the Impact of Financial Openness on Dynamic Adjustment of Corporate Capital Structure |
| CHENG Xinsheng，LIU Zhenhua，XU Nuo |
| 1.Nankai University, Tianjin, China；2. Zhejiang University of Finance and Economics, Hangzhou, China |
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Abstract Based on the data of Chinese A-share listed firms from 2006 to 2020, this study explores the influence and mechanism of financial openness on dynamic adjustment of capital structure. The results show that financial openness improves dynamic adjustment of capital structure, and the relationship is more significant in the samples of non-state-owned and financially underdeveloped regions with small asset scale, as well as export-oriented enterprises. The mechanism test shows that financial openness significantly alleviates financing constraints of enterprises, thus increasing the speed of capital structure adjustment. Finally, this study also finds that financial openness increases the probability of capital structure adjustment by increasing debt and reducing equity when capital structure deviates downward from the target value, or reducing debt and increasing equity when capital structure deviates upward from the target value.
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Received: 13 March 2023
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