Corporate Optimal Debt Financing Work: Based on Security Design Theory

Author: Jiang Qiankun
Publisher:
Publishing Time: Not Available
Features: Traditional research on capital structure issues assumes that stocks and debt financing instruments are exogenous securities predetermined 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. This book innovates in research methodology by treating different debt financing instruments as distinct financial contracts, pre-eventally designing the optimal structure among them, and incorporating creditors' ex-post protection mechanisms into the analytical framework.
By conducting a detailed analysis of the debt financing status of domestic listed companies, this book explores the correlations between various debt financing instruments and corporate performance. Furthermore, drawing on valuable experiences from emerging market economies in effectively developing corporate bond markets, it proposes corresponding feasible recommendations, which also represents 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 development stage. 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, building on this book, will learn from the strengths of others and continue to achieve more outstanding academic results in future research!