Dissertation > Excellent graduate degree dissertation topics show

Comparative Institutional Analysis of the international financing model

Author: GuoShiBo
Tutor: DingJianChen
School: University of Foreign Trade and Economic
Course: Finance
Keywords: financing model " arm`s-length financing" "relational financing" CIA
CLC: F275
Type: Master's thesis
Year: 2006
Downloads: 726
Quote: 2
Read: Download Dissertation

Abstract

Financing model is reflected in the government, enterprises and the relationshipbetween market mechanism. Finance structure is the content and objectives of thecorporate finance decision-making structure, and to some extent it reflects thecompany’s operation and financial situation. Company financing in a country with thecharacteristics of their personality, which depend on a country’s economic system,social system, economic operation mechanisms, economic mode of operation andownership structure of a combination of factors, and different ways of financing adiverse corporate finance structure.Direct financing and indirect financing division is of great significance in theeconomic analysis of the two basic financing. They have very different functions. Andthe existence of two international market financing model representative: a state isrepresented by the U.S.A and the U.K, the securities market-based financial model,the "relational financing" system;Another is Japan, Germany and other countriesrepresented banks-based financial model In Japan and Germany, respectively knownas the "main bank system" and "Almighty Bank" financing system that is"arm`s-length financing" system.Different financing systems are only methods to support economic growth, thefinancing patterns of a country is determined by its own economic development level,economic development goals, the degree of market development, legal and moralconstraint, historical and cultural background, and other factors. Therefore, to carryout a comparative analysis of the typical financing system had to involve the analysisand comparison of governance model and cultural beliefs.Reasonable financing structure is the result of the efficient functioning of thecompany assets, as well as its starting point, therefore determining reasonablefinancing structures is very important for enterprise`s survival and development.Through the horizontal comparison between the "relational financing" system and the" arm`s-length financing" system, we do a profound analysis of typical significance ofthe differences in the two companies financing structures, summing up the pros andcons and their characteristics. Two models have their own advantages, all countriesare based on the characteristics of their own country-specific economic system andtheir own company’s to decide adopt which financing structures. And in today’s world,there is both integration and complementary advantages trend of the two models.China’s economic system reform and the changes in financing model is differentfrom the characteristics of the Western countries, we can not copy the Western modelof any country, and we should be based on our own conditions, to get a long-rundevelopment.The main analytical tool is the Comparative Institutional Analysis(CIA), focuson economic models, system changes and historical and cultural factors which are thedeep-seated factors affect the financial system. The structure of the text as follows:In the prolegomenon, firstly introduced the background and significance of theselection of the subject, and then defines the financing and financing structures. Thispaper deals mainly with the narrow concept of financing——the financing ofcompanies, viz. through the financing channels and capital markets, the companiesconcentrate of funds economically and effectively. Then defines the financial structureas the direct financing and the indirect financing, and form the ComparativeInstitutional Analysis for the different countries of corporate finance structure andfinancing model. Finance theory is the study of the structure of corporate financecapabilities and financing business performance and impact of the decision. Thesetheories on the definition and concept for this later on the comparative analysis ofnational financing structure laid the foundation.The core of the article is the second part and the third part. In the second partfocuses on the comparison of " arm`s-length financing " system and "relationalfinancing" system, especially on the features of financing, the effects of corporategovernance and the relations of bank-enterprise. The third part analyze the currentfinancing model of our country, their disfigurements, and giving corresponding policyrecommendations.In the " arm`s-length financing " system, the outside sources of funding whatenterprises needs, primarily through the issuance of securities in the securities market,banks are in a relatively minor status. The direct financing is the larger proportion,capital markets are developed, the equity structure is very fragmented. In the"relational financing" system, bank-enterprise relationship is close. An enterprisegenerally hold a long connection with their host bank. Banks take the share ofenterprises, then forms the combination of both bank and enterprise.China’s financing system as followed as China’s economic system reform and theevolution ,the financing system changed from the financing system leaded by thegovernment to the bank-led financing model, and finally develop into amulti-financing system. Before the reform, enterprises operating without the right torise money;At the beginning of reform, the bank has become the main channel forcorporate finance;In the 1990s the capital market in China developed, our country hasentered into a multi-financing institutions.In addition, China and Japan are similar at the economic structure and culturalbeliefs, the financing model of China conform to the "relational financing" system.Therefore, I believe that China should first learn from Japan and Germany, andconsider the reality of our social environment, the specific circumstances ofdevelopment. Then refer to the " arm`s-length financing " system.There are some shortcomings in the financing institutions of our country, the rootof the matter is the soft-restrict of budget, the irrational of enterprise propertystructure, the difficulties of savings change into investment. Therefore, China musttake specific measures to improve the bank-enterprise relations as soon as possible,improve the capital market and develop enterprise bond market.

Related Dissertations

CLC: > Economic > Economic planning and management > Enterprise economy > Corporate Financial Management
© 2012 www.DissertationTopic.Net Mobile