The Impact of Capital Structure on the Choice of Dual-Class Share Structure:Empirical Evidence from Chinese Concept Companies Listed in the US
The listing system of dual-class share structure in IPO provides an opportunity to study the influence of capital structure on equity structure.Based on the samples of Chinese concept stock companies listed in the United States from 1991 to 2023,this paper discusses the influence of capital structure on the choice of dual-class share structure from the perspectives of the reasons and results of selection.Through principal regression and various robustness tests such as instrumental variables and subsample regression,it is found that enterprises with higher financial leverage are more likely to choose dual-class share structure for listing,and this trend is more obvious in the enterprises with more short-term debts and strategic emerging industries.From the selection results,based on the governance role of debt,the dual-class share structure of highly leveraged enterprises is more conducive to protecting the interests of external shareholders and enhancing shareholder value.Further research shows that internal shareholders can reduce the debt risk effect by setting a higher voting rights multiple,but also weaken the debt governance effect,while holding more cash flow rights can enhance the debt governance effect.The higher the enterprise growth,the stronger the industry competition and the more asset-heavy operation,the stronger the debt governance effect of high-leverage enterprises choosing dual-class share structure.The unique research perspective has made incremental contributions to the research of dual-class share structure and capital structure.
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