Influencing Factors of Equity Financing Preference: Empirical Evidence on China's Listed Companies

The paper samples from A-share companies listed in Shanghai Stock Exchange and Shenzhen Stock Exchange, and uses the linear probability model to test the factors causing equity financing preference in China's listed companies. The empirical results show that the capital structure and corporate ownership structure do not have a consistent explanatory power in the financing behavior of China's listed companies, and that the refinancing eligibility and the firm size play a significant role in financing decisions. It is concluded that the purpose of equity financing is to meet the demand of liquid capitals or investment funds.