Best Debt Financing Tools for Enterprises - Based on Security Design Theory - Collection of Works by Young and Middle-aged Economists

Author: Jiang Qiankun
Publisher:
Publish Date: 2006-10-01
Features: Traditional research on capital structure issues assumes that stocks and debt financing instruments are exogenous securities given in advance. However, the rapid development of financial innovation has made the boundaries of various debt financing instruments increasingly blurred. Townsend (1979) pioneered endogenous security design theory, which explores how to optimally design cash flow distribution and corporate control arrangements in the financing process from a pre-event perspective. This has greatly spurred the advancement of financial contract theory. By treating different debt financing instruments as distinct financial contracts, this book innovates in research methods by pre-eventally designing the optimal structure between them and incorporating creditors' ex-post protection mechanisms into the analytical framework.
Through a detailed analysis of the debt financing of domestic listed companies, this book explores the correlations between various debt financing instruments and corporate performance. Building on the valuable experience of emerging market economies in effectively developing corporate bond markets, it proposes corresponding feasible recommendations, which also represent the empirical value of this book. The author has conducted extensive, detailed, and creative work on corporate debt structure issues, demonstrating strong theoretical and practical significance.
Of course, corporate capital structure issues are vast and profound, and security design theory is still in its initial stage of development. Further research is needed on how to design a corporate debt structure with Chinese characteristics in line with the country's realities. It is hoped that the author, based on this book, will learn from the strengths of various schools and continue to achieve more outstanding academic results in future research!