1. A Review of Foreign Literature of Capital Structure Adjustment and Prospects
魏冰冰 

2. CONTENTS Basic Information Research Framework
Basic Theory
The development of the review
Conclusion（Research Direction）

3. Basic Information Authors: HU Jian-xiong and MAO Ning
Source: Foreign Economics & Management Aug.2014, Vol. 36 NO.8

4. Capital Structure Adjustment
Research Framework
Unified Analytical Framework
Perspective of Strategic Decision
Future Prospects
static balance theory
Dynamic Trade-off Theory
Financial Flexibility
Capital Structure Adjustment
Optimal Order Theory
Manager Heterogeneity
Market Timing Theory
Debt Heterogeneity
Other Theories
Speed of Adjustment
Adjustment Mode
Target capital structure
Basic Theory
The development of the review
Research direction

5. Research Framework Basic Theory
The adjustment of capital structure is based on a series of theories, such as Dynamic Trade-off Theory, Optimal Order Theory and Market Timing Theory. And then capital structure adjustment theory evolves into two development directions.
The Dynamic Trade-off Theory (Target Capital Structure)
Optimal Order Theory (information asymmetry ) and The Market Timing Theory (irrational behavior of investors)

6. Capital Structure Adjustment
Research Framework
Capital Structure Adjustment
The speed of adjustment
Influence factors:
①external factors: Industry factors, institutional factors, financing constraints, macroeconomic conditions, stock mispricing etc.
②internal factors: Profitability, growth opportunities, company size, debt contract, deviation distance (the degree of deviation between real capital structure and target capital structure) etc.

7. Capital Structure Adjustment
Research Framework
Capital Structure Adjustment
Adjustment Mode
The alternative means of adjustment of capital structure include credit lines, choice of share dividends, share buybacks, cash and other means, each of which corresponds to different adjustment costs respectively, which also affects the decision-making process of the adjustment of capital structure.

8. Capital Structure Adjustment
Research Framework
Capital Structure Adjustment
There are complex correlations and causal relationships among various financial decisions of the company. Therefore, scholars began to explore the decision making of capital structure adjustment from the perspective of corporate strategic decision.

9. Conclusion
The literature review shows that there are two main deficiencies in the existing research on capital structure adjustment.
a reasonable explanation for the phenomenon of low leverage (or even zero leverage)
Lack of analysis of managers' behavior factors

10. Conclusion
In view of the above shortcomings, future research can be improved and expanded from the following three aspects:
Research on the relationship between financial flexibility and capital structure adjustment decision
Research on capital structure adjustment decision under the assumption of manager heterogeneity
Research on capital structure adjustment decision under the condition of debt heterogeneity

11. Thank You!