On Chinese Listed Companies' Financing Pecking Order Based on Information Asymmetry

According to capital structure pecking order theory,in order to avoid underinvestment due to equity undervaluation because of information asymmetry,the corporate financing order should be internal financing-debt financing-equity financing.Based on ordered probit model and likelihood ratio test,this paper finds that Chinese listed companies'financing order is internal financing-equity financing-debt financing,that is,the listed companies prefer equity financing in China,and this preference is affected more by the cost of capital than information asymmetry.