Research On The Mechanism Of The Impact Of Financing Structure On Firm Performance

Concerning the microscopic study of enterprises,issues of its financial structure,innovation,performance and the relationships among them have always been the focus of the study of economics,management and other study fields.The study of relationships among them was first carried out in the field of traditional finance,which focused on the relationship between corporate financial structure and its performance.In 1980s,the academia began to do the research about the relationship of corporate financial structure,innovation and its performance from the perspective of market competition with the cross-development of the theory of industrial organization and financing.But so far,in this field,considering the different stages of innovation,there is just a small part of profound study about corporate financial structure,its innovation input and its performance.In view of the deficiencies or gaps in this area,this dissertation tries to put forward a chain mechanism of "financial structure?innovation input?corporate performance" based on "S-C-P",a research paradigm of the theory of industrial organization.Through influence mechanism analysis and empirical test,to further explore the mediating effect of innovation input and the issue on the effect of financial structure on its performance through the innovation input.The significance of this dissertation,on the one hand,to expand some point of view in the traditional financing theory,on the other hand,some related decision-making and policy suggestions can be put forward about the implement of innovation strategies,financial structure matching in our country.Mechanism analysis:First,investigate the direct influence mechanism of corporate financing structure on its performance.The definition of financial structure in this dissertation is composed of debt financing and equity financing.So,this part focused on distinguishing debt financing and equity financing and studyed the different impacts of them.One is based on the analysis of cost and effect of debt financing,using the basic model from the researches of Wilhelm Pfahler,Harald Wiese(2000)Zhao Ziqiang(2008)for references,through the analysis of the direct effect,the agency effect and the strategic effect of debt financing,studying the direct influence mechanism of debt on the performance.The other is based on the analysis of financing cost of equity financing and agency cost of equity structure,study the direct influence of equity financing on the performance,besides,according to the agency cost theory,signaling theory and information asymmetry theory,using the basic agency cost model from the researches of Ross(1977),Hart&Moore(1994),Liu Zhibiao(2004)for references,study the influence mechanism of financial structure,composed of debt financing and equity financing on the performance.Second,to investigate the indirect influence mechanism of corporate financial structure on its performance through the innovation input.One is to study the influence mechanism of financial structure on the innovation input.Based on the characteristics of innovation,using the basic oligopoly game model from the researches of Brander&Lewis(1986)and Wang Xiaochun(2002),to analyze the impact of debt financing on the innovation input from the perspective of market competition.Then using the multiplier method from the researches of Spiros Bougheas(2004)to analyzes the impact of equity financing on the innovation input from the perspective of information asymmetry.The other is to study the influence mechanism of the innovation input on the performance.Based on the traditional general theory,which is about the impact of innovation and R&D input on the performance.Learning the idea of "black box" in CDM model,to analyze that how innovation input influences the performance from the process of innovation input,innovation transformation and innovation output.According to the analysis of the influence mechanism of financial structure on the performance,this dissertation put forward two important empirical hypotheses:First,corporate financial structure has a direct influence on its performance,especially when the ratio of equity and debt is too large,which has negative influence on its performance.Second,corporate financial structure has an indirect influence on its performance through innovation input,in which the innovation input plays an important mediating role.Empirical analysis:This dissertation selected full sample data of 6156 industrial enterprises from the third national economic census of Shenzhen City in Guangdong Province as a test object,based on the factual description of the present situation through analyzing the aspects of role of innovation objects,establishment of innovation environment,innovative talents and financial market construction,to explain the reason why chose Shenzhen as the sample area.Empirical study is based on the above.Firstly,to establish the comprehensive index of corporate performance and innovation input through factor analysis.Secondly,making use of mediating effect model and Euler equation in the sequential test of innovation's mediating effect and the influence of financial structure on the performance.Thirdly,in order to solve the endogenous problem and stability test,this part took advantage of instrumental variable and alternative variable.Finally,in order to guarantee the stability of the result and test the regulating effect of innovation at same time,this part added the interaction items to the model.Main Conclusion:First,the empirical results show that financial structure positively affected corporate performance,but the direction of the impact is not totally consistent with the assumption,in which debt financing has a negative impact on corporate performance.The reason is perhaps that the debt market is underdeveloped,the financing mechanism is not perfect and the financing channel is relatively low in our country.Under this circumstance,the means of debt financing are too single and the amount is too small,so it is difficult to exert direct effect and governance effect for a corporate and it still adds the cost.On the contrary,equity financing positively affected corporate performance,which suggested that the impact of equity financing on corporate performance depends not only on quantity but also on quality.Reasonable ownership will produce lower agency costs,but it will exert more effective governance effect,then to promote corporate performance.Therefore,financing structure formed by the ratio of equity and debt within a reasonable range has a positive impact on corporate performance.Second,as a part of mediate variables,innovation input has a partial mediating effect,and the financing structure has a positive influence on the corporate performance.First of all,the financing structure positively affected the innovation input,in which equity financing plays a promoting role in the innovation input,whereas debt financing has a certain inhibitory effect on it.Normally,the corporate innovation input tends to equity financing,the greater the ratio of equity and debt is,the greater the intensity of the innovation input is.Secondly,innovation input positively affected corporate performance,which perhaps has a certain leg.Normally,the greater the intensity of innovation input is,the higher the efficiency of innovation transformation is.It means that in a shorter period of time to turn out in an effective innovation output,which positively affected the corporate performance.Again,innovation input plays a partial and significant mediating effect,although the financing structure affected the corporate performance indirectly not entirely through the innovation input,innovation input is still an important way in which the financing structure affected the performance indirectly.Third,the direct influence of the financing structure is greater than the indirect influence effect of that through the mediating variable of innovation input.However,the mediating effect of innovation input accounts for a large proportion in the total effect,playing an important role.Through the mediating test,calculating the numerical value of the direct effect and mediating effect,the results showed that the sum of the direct effect of the financing structure and the indirectly affect through the mediating variable of innovation input is close to the total effect,which showed that the two kinds of influence are main and the important.Meanwhile,although the indirect effect of the financing structure through the mediating variable of innovation input is lower than the direct effect of that,the innovation input still accounted for nearly 30%in total effect,which showed that the significance of the mediating effect of innovation input.Besides,after the regulating effect test of the innovation input,it suggested that the innovation input is a mediating variable with regulating effect,which positively regulating the relationship between the financing structure and the corporate performance,and strengthening the marginal effect of the financing structure.The above description suggested that in order to strengthen their competitive advantage and achieve sustainable development in the face of increasing fierce market competition,it is indispensible and meaningful for a corporate to implement the technological innovation.