For a long time, because inefficient state-owned enterprises occupy most of the capital input and the capital output rate is low, in order to maintain a certain level of employment and social stability, the government has to increase the capital input rate by expanding the scale of bank credit and fiscal deficit to maintain a high GNP growth rate, resulting in a serious debt crisis, and the government has to carry out the whole economic system reform with state-owned enterprises as the core. With the company restructuring, China's market economy reform has entered a new stage, but the formal shareholding system reform is far from meeting people's expectations. In order to maintain sustained economic growth, ease employment pressure and promote enterprise restructuring, the government has invested heavily in Keynesian finance in recent years, hoping to stimulate investment and demand. However, the prosperity of macro-economy comes from the vitality of micro-economy, and the success or failure of this short-term macro-economic policy depends largely on the current corporate reform.

Second, the company capital structure and corporate governance

Generally speaking, a company's capital includes its own capital and borrowed capital. Self-owned capital refers to the sum of the capital invested by the owner and the capital accumulated by the company during its operation. Borrowed capital refers to the capital invested by creditors. The capital structure of a company consists of the structure of its own capital and borrowed capital and their proportional relationship, including the structure of its own capital (involving the ownership structure), the structure of borrowed capital and their proportional relationship. Obviously, the formation of capital structure is closely related to owners, creditors and managers.

First of all, let's briefly analyze the influence of the interaction between shareholders, creditors and managers on the capital structure in an ideal state. Let s be the initial self-owned capital invested by the owner, and D be the borrowed capital invested by the creditor, regardless of interest; △S is the expected new capital brought by the supervised and constrained managers operating all the capital, so the actual debt ratio in advance is D/(S+D), and the expected debt ratio afterwards is D/(S+△S+D), as shown in the figure. Assuming that capital investors (owners and creditors) and managers want to maximize the capital value of their investment in enterprises, we can draw the following conclusions from the analysis of the chart:

(1) Creditors are not sensitive to excessive △S, but when they expect (S+D+△S) (2) If the uncertainty of the expected △S generated by investment is high, even if creditors are willing to provide loans, considering the debt repayment pressure (restricting investment in further profitable projects) and the consequences of being unable to bear debts (bankruptcy), in order to protect the capital S of their investment enterprises, owners

(3) If, on the one hand, the constraints of owners and creditors are "hard", owners may give managers better incentives in order to expect △S to be as large as possible; On the other hand, when the expected △S is small, excessive debt will increase the bankruptcy risk of the enterprise, and the manager may be replaced by the owner. Considering the benefits of personal control to work, managers are unwilling to risk bankruptcy or dismissal to borrow money.

Only under the action of these three basic restraint mechanisms can corporate debt maintain a reasonable structural range; From the point of view of maximizing the company's value, the distribution of control rights caused by the company's capital structure and related mechanisms determine whether high-ability managers can be hired and whether managers can try their best to maximize △ S. Because the size of △ S is closely related to managers, it is necessary to make further theoretical analysis on the company structure.

As we all know, corporatization is a typical form of modern enterprise system, which is characterized by the separation of ownership, management and control. Because the utility functions of managers and owners are different, they have different responsibilities for business performance. Asymmetric information leads to high information cost for supervision, and there is a problem of "hitchhiking" for owners. Managers (agents) may use their existing status, power and information to pursue their own best interests instead of owners (clients), thus generating entrustment. Modern enterprise theory holds that the efforts and part of the costs of managers in the company belong to private information. Due to the uncertainty of transaction costs and future events, it is almost impossible to sign a completely optimal principal-agent contract for managers to do and to what extent. When some behaviors in the company must be determined in the future and the incomplete initial principal-agent contract cannot be specified, a legal framework is needed to restrain managers from deviating from the interests of shareholders. Corporate governance structure is such a framework, which refers to a set of relationships among management, board of directors, shareholders and other stakeholders (OECD,1999); Or a set of institutional arrangements to deal with the relationship between shareholders, lenders, managers, employees and other different stakeholders in order to achieve economic goals. It can be regarded as a decision-making mechanism when there is something not stipulated in the initial contract, and its essence reflects the allocation of control rights caused by ownership arrangement in enterprises. The premise of corporatization requires clear property rights of legal persons, and a clear property rights structure is conducive to the rearrangement of control rights after corporatization. Since the ownership of an enterprise refers to its residual claim and control right, in order to solve the incentive problem of the enterprise and the choice of managers and maximize the value of the company, the arrangement of control right should make them correspond, especially the distribution of residual claim and control right to the most important, most difficult to supervise and most informative members of the enterprise, which is of great significance to the efficiency of the company. It is these institutional arrangements that dominate the relationship between shareholders, creditors and managers who have great interests in the enterprise, so that all parties involved can realize their respective economic interests from this relationship.

There are many forms of corporate control arrangements and governance structures to achieve this goal. The reality of agency cost shows that the economic efficiency actually achieved by modern companies is always suboptimal. The suboptimal theory determines that the corporate governance mechanism of different companies and different economic environments is different. There is no corporate governance mechanism applicable to all types of enterprises and all economic environments. The reform and reorganization of state-owned enterprises is essentially a camera choice of various possible ways of corporate governance mechanism, among which property rights transaction and merger and bankruptcy mechanism are effective means to transfer control rights and adjust governance structure. Corporate governance models can be roughly divided into two types: one is the American-British model, and the role of shareholders depends on the capital market; One is the German-Japanese model, in which banks rely on mutual shareholding. The former may lead to underinvestment, while the latter may lead to overinvestment. Underinvestment and overinvestment are not conducive to maximizing the company's value. A series of financial system reforms in China show that corporate restructuring in China tends to establish the first governance model. Then, what mechanism should exist in this model to make managers reduce the above-mentioned agency behavior, which is conducive to the optimization of capital structure?

Third, corporate governance mechanism and managers.

In the corporate governance structure, there are generally seven governance mechanisms to adjust the interest relationship between managers and investors (shareholders and creditors): internal mechanism, institutional shareholding, major shareholder, external director, debt policy, manager market and control market. Among them, the first four are internal selection mechanisms, which are influenced by the company's shareholding structure, while the last three are determined by the outside. The interaction of these seven mechanisms determines the severity of the agency problem.

When the ownership in the company is very scattered, because the supervisor has to pay all the supervision costs, he can only get a small part of the income, and the problem of hitchhiking among shareholders is generally serious, and no one has the enthusiasm to supervise the manager; Even if the equity is very concentrated, such as state-owned enterprises or state-owned listed companies, it is difficult for managers to be directly supervised by major shareholders (the whole people). In these two cases, the actual control right of small and medium-sized investors is not very important, and the effective control right of managers is great. Managers with low management ability can still occupy a dominant position, and managers can easily infringe on the interests of investors by expanding the company scale, transferring pricing, increasing unnecessary expenses and investing in projects that are more beneficial to them. This situation is still common in the restructured companies in China. Theoretically, managers always tend to expand their scale to obtain personal interests, so it should be a good mechanism for managers to hold shares or subscribe for larger shares and supervise themselves. However, in state-owned companies, even if managers own shares, it is difficult to play this role. When ownership is centralized, external investors have a strong motivation to collect information and supervise managers, thus avoiding hitchhiking to a certain extent (the concentration of state-owned shares has no such effect). However, the concentration of equity has changed the principal-agent status of the company, and it is impossible to completely eliminate the agency problem. Because, first of all, institutional shareholding itself brings a new level of agency problem; Secondly, because he can't get all the benefits from supervision, the major shareholders can't do their best to supervise. On the contrary, he can achieve his goal by harming the interests of other shareholders. Therefore, the governance of major shareholders (institutional shareholding, major shareholders) who lack effective protection for small and medium-sized investors may not be optimal. Theoretically speaking, the board of directors is very important to corporate governance, but its efficiency is questionable, because the executive directors themselves are managers, so it is difficult to expect the executive directors to supervise the managers, and the external non-executive directors are not driven by enough interests to better supervise the managers. In state-owned companies, it is even more doubtful how much motivation and ability the board of directors has to motivate, restrain and supervise managers.

It can be seen that the similarity of the above four internal governance selection mechanisms is that even if the company's management performance is greatly improved, supervisors (or self-supervisors) can only get part of the benefits. In other words, a mechanism with lower cost and stronger binding force is needed. Managers' market and control market are considered as effective external mechanisms to control and restrain managers, but they depend on the development of labor market and capital market. For our country, these two markets have just developed and their functions are extremely limited.

Another important mechanism to restrain managers is the company's capital structure, especially the choice of corporate debt. From the perspective of control, the essence of debt is the ability of creditors to exercise control, while creditor's rights are a kind of camera control. When the company violates the terms of the debt contract or fails to repay the debts due, the creditors will exercise their legal rights to maximize the preservation of the capital they have invested. The threat of creditors' liquidation or bankruptcy will constrain managers' investment behavior for the purpose of expanding scale and obtaining personal interests, and at the same time force owners to strengthen supervision and encouragement of managers and replace current managers when necessary. As such a binding tool, debt is based on a reasonable bankruptcy mechanism. When the bank is the largest creditor, the conditions for the control camera to switch are as follows: first, its own loan structure should be reasonable, otherwise bankruptcy will expose its financial situation, and the bank will fall into the negative state of creditors, that is, the company (especially the extremely low company in liquidation value) will not repay the loan when it expires, and the bank will not let the enterprise go bankrupt; Second, the allocation of loan capital of banks should not be interfered by policies, otherwise banks will have no incentive to supervise enterprises and the creditor's rights mechanism will lose its function. Only when banks have the ability and motivation to supervise the company's situation can they play their role as creditors. It can be seen that the reform of China's banking system is very important for the optimization of enterprise capital structure.

In reality, the two governance models, represented by the split share structure and bank shareholding, have encountered problems in the company's operation. The corporate reform in the United States and the reform of the main banking system in Japan show a trend of integration and convergence. An Nu, an American scholar, has made an empirical study on external governance and internal governance and their interaction, arguing that the choice of mechanisms is replaceable and interdependent, and overemphasizing a single mechanism is not conducive to maximizing enterprise value. And all the mechanisms are almost ineffective, which will give managers great control and the company's capital structure will inevitably deteriorate.

Four. Debt Mechanism, Manager Incentive and Capital Structure Optimization

Both theoretical and empirical studies show that some form of ownership concentration, legal protection for small and medium-sized investors and a strong debt mechanism should be the basic characteristics of a good governance structure. Since debt is more of an ex ante restraint mechanism, in order to reduce the possibility of managers' negative afterwards, managers should be given direct reward incentives and appropriate property rights incentives on the basis of developing competitive capital markets and managers' markets, such as allocating some shares, stocks and options to them, and at the same time, a credible manager replacement mechanism should be determined according to the size of their control gains. Our present situation is that state-owned shares still account for a high proportion in state-owned companies. Even if the initial client falsely establishes state-owned shares, even if the shares are concentrated, there is no incentive for supervision. On the contrary, government officials may collude with managers as agents, institutional investors and small and medium-sized investors are still in a weak position, and relying on actual shareholders to supervise managers can only achieve limited results; The capital market and labor market have just developed, and the role of control market in corporate governance has been limited recently; As the largest creditor, the bank has never been able and motivated to transfer the control right of the camera (one of the reasons is that the bankruptcy mechanism is still limited), and its commitment is not credible. Neither the choice of managers nor the remuneration of managers has the characteristics of market competition. As a result, managers have great effective control power, and the problem of insider control is more serious. Therefore, state-owned enterprises still have no governance mechanism to optimize the capital structure. It can be seen that in order to encourage managers to invest and expand, limit and restrain their ineffective expansion and ensure the efficiency of investment expansion, we should develop two markets, not only to protect the interests of small and medium-sized investors, but also to shape real large shareholders or institutional shareholders with a large proportion of shares, and at the same time to strengthen the construction of debt restraint mechanism and manager incentive mechanism.

The author believes that with the reform of the banking financial system, the debt mechanism and manager incentive will first play an active role in reconstructing the governance structure and optimizing the capital structure. According to principal-agent theory and free cash flow theory, managers tend to pursue scale and expand investment, and investment decisions may be suboptimal as a whole. The income of investment projects directly affects the company's capital structure, so that managers' investment incentives have a very strong correlation with the capital structure. Therefore, in order to optimize the capital structure, it is necessary to limit the ability of managers to infringe on the interests of other investors. The main way to optimize the capital structure is to strengthen the supervision and encouragement of managers through effective equity structure reform, maximize the effectiveness of personal participation under the premise of abiding by the company law, and restrain the cash flow that managers can get through debt in the future, thus restraining the expansion behavior of managers that damages the enterprise value and pursues personal interests. Because of the low cost of equity financing in China, equity financing does not affect managers' control over the company, but increases managers' discretionary cash flow. In contrast, debt financing may be a bigger constraint. We should give full consideration to debt financing, which can control the company's free cash flow and restrain managers' rent-seeking and over-investment to some extent. The continuity of operation and the uncertainty of external environment determine that the capital structure of a company should be dynamic. Under the action of the above-mentioned reasonable mechanism, the optimization of capital structure should be manifested as the independent optimization behavior of the company. In this sense, simply adjusting the debt ratio cannot solve the fundamental problem in the optimization of capital structure.

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