However, in spite of the difference of analysis point of view and the function mechanism, a coincident research result is achieved in the two conditions, that is, when the degree of asset specificity is increased, the shares of equity financing would increase and the debt financing reduce.
Lag of enterprise bond financing development results in enterprise debt financing channel narrowness, over-depending on bank loan, and thus conduces finance risk accumulating in bank sector, without release in indirect financing markets.
Furthermore, debt financing is compared with equity financing and advantages of corporate bond market are explained, and we get to the conclusion that it is urgent to develop China's corporate bond market.
On the other hand, firms with higher levels of venture capital funding and/or debt financing are more fully priced.
The availability of three types of financing sources was analysed: traditional debt financing, venture capital financing, and informal investments.
When financial capital is further divided into debt and equity, the results indicate a significantly positive relationship between profitability and equity financing, but a significantly negative relationship between profitability and debt financing.
This evidence supports the investment opportunities hypothesis that secured debt financing is more valuable for issuing firms with high growth opportunities.
The optimal capital structure is all equity for firms with more value in growth options (or intangible assets) and tends to involve debt financing for firms with more value in tangible assets.