Innovation and Development Path of Corporate Finance Theory

Corporate finance of China has experienced significant transformation from Soviet finance to American finance. The prevailing American finance still has many deficits and needs further development. Innovation and development path of corporate finance theory is diverse. Among that, transformation of research methodology, development of new corporate finance research fields and modification of fundamental assumptions are three important innovation paths which are logically related. The transformation of methodology involves individualism and formalism. Extension of financial areas includes commodity market finance, macro finance, distribution finance, supply chain finance, environmental and ecological finance, institutional finance and internet finance. Modification of fundamental assumptions refers to legal fiction of company assumption, rational economic man hypothesis, zero embeddedness hypothesis, efficient market assumption, sustainable development assumption and counterfeiting of cash flow hypothesis. Innovative corporate finance theory can be conducted based on these modifications of fundamental assumptions.