earticle

영어

The inflation often causes insecure impact on the capital structure, and the inflation is used as an important indicator of the economy state. To analyze the insecure impact of the inflation, an analysis model is proposed to reflect the inflation’s effect on the capital structure of the company, in this paper. We use the parameter CPI to measure the inflation. Because the inflation is a time series that affects the capital structure for a long time, we choose different CPIs for different time, i.e. the current month (CPI), three months ago (CPI3), six months ago (CPI6), one year ago (CPI12), half and one year ago (CPI18), and two years ago (CPI24). With the financial data of the companies listed in the Chinese stock market, we empirically testified the outcomes of this model. The results of this analysis show that only the increasing inflation or the decline of corporate income tax rate will increase the company's debt ratio. However, these two factors together will decrease the debt level of the company and cause the insecure financial impact.