Free Trade Zone Institution and Capital Structure Dynamic Adjustment
The establishment of free trade zone(FTZ)has brought new opportunities and challenges to the firm's development through institutional innovation.Based on the data of A-share listed firms from 2007 to 2019,this paper is the first to study the effect of the establishment of FTZ on the dynamic adjustment of capital structure.It is found that the establishment of pilot free trade zones significantly improves the capital structure adjustment speed of firms,and this effect is more significant for non-state-owned and under-levered firms.In addition,the mechanism study shows that the establishment of FTZ affects capital structure adjustment through two channels:financial constraint channel and market competition channel.Further research reveals that the establishment of FTZ reduces the debt financing costs for firms and promotes both debt and equity financing activities.This paper conducts a series of robustness tests using instrumental variable method,propensity score matching method,placebo test,and alternative capital structure measures and estimation methods,and finds that the research conclusion still robust.In conclusion,this paper evaluates the micro effects of the construction of China's free trade zones from the perspective of capital structure optimization.
Free trade zoneDynamic adjustment of capital structureFinancial constraintsMarket competition
万方数据
维普
