Business environment and corporate financing decisions: From the perspective of dynamic adjustment of capital structure

This paper studied the impact of business environment on enterprise from the view of capital structure dynamic adjustment using the system-GMM. The results showed that a great business environment accelerates the adjusting speed of companies' capital structure. And the optimization of business environment could relief the financing constraint and reduce the cost of company. Additionally the business environment optimization effect on the speed of capital structure adjustment of non-state-owned enterprises, non-bank-related enterprises, and enterprises with high industry competition. These results show that continuous optimization of the business environment will provide a more "market-oriented and fair" financing environment for Chinese enterprises.