The Correlation Research Between Capital Structure And Financial Performance Of Chinese Listed Eco-friendly Companies

The environment pressure makes the environment protection industry a hugely potential sector which calls governmental subsidizing policies at same time. As independent individual theories, the capital structure and financial performance are very important; however, currently there is a lack of research on correlation effect of these two. Hence, this paper tries to analysing the correlation effect base on the companies in environment protection companies to provide references for optimizing capital structure and financial performance of environment protection companies.In the theory analysing part, the literature review method is applied; in the positive research part, mathematical methods is applied by statistical tool(SPSS 17.0) on statistical description, factor analysis and multi-regression analysis. There are three major originally academic creations involved in this paper which are an analysis for an industry never being analysed based on correlation of capital structure, financial performance and a series of new benchmarks are applied.In terms of the structure of this paper, it firstly reviews the current research from both China and overseas which found out that there is no unified conclusion on this topic; secondly, it discussed the basic theories of capital structure and financial performance; thirdly, after descriptively statistical analysis, it discovers two major phenomenon which are imbalanced debt structure and highly-concentrated equity holding; finally, an multi-regression statistical analysing based on 97 listed companies revealed that financial effect has negative relation between debt to equity ratio or current liability ratio but has positive relation between equity holding concentration or proportion of state-owed share; liability has positive relation between profitability or receivable collectability but has negative relation between debt risk tolerance, management ability or asset turnover; equity concentration has positive relation between profitability, debt risk tolerance or management ability but has negative relation between asset turnover or receivable collectability. This paper contains 11 figures, 24 tables and 55 bibliographies in total.