Comparative Study On Debt Financing Performance From The Perspective Of Equity Structure Of Chinese And American Enterprises

In China,debt financing is the most important financing channel for enterprises,but in reality,the debt financing of enterprises has two sides.On the one hand,debt financing provides financial convenience for enterprises.When the performance of fund use exceeds the cost of debt financing,debt financing can improve the level of shareholder investors’ income;On the contrary,improper use of debt financing and low financing performance will degrade the value of the enterprise and bring financial risks to the enterprise.In recent years,the level of corporate debt financing in China has shown a significant upward trend,while corporate debt default cases continue to occur.Rising debt levels and debt defaults indicate that corporate debt financing risks are accumulating,suggesting that we must always pay attention to the financial risks caused by debt financing.In the past,research on the prevention of corporate debt financing risks has mostly focused on the perspective of total debt control and macro policy.This article has jumped out of traditional thinking and considered ways to mitigate debt risks from the perspective of debt financing performance.By comparing the differences in equity structure between Chinese and American companies,analyzing the effects of corporate equity structure,exploring the relationship between corporate equity structure and debt financing performance,and based on the actual operating data of non-financial listed companies in China and the United States from 2011 to 2020,measuring and comparing debt financing performance,and empirically testing the impact of corporate equity structure on debt financing performance in both countries,Based on the development trend and reform direction of China’s enterprise equity structure,this paper proposes the idea of optimizing China’s enterprise equity structure,establishing an endogenous control mechanism for enterprise debt risk,and preventing enterprise debt financing risk.The main content of this article consists of eight parts: The first part is the introduction,which mainly introduces the practical background,purpose,methods,and basic concepts involved in the study,such as defining debt financing performance and explaining relevant connotations.The second is theoretical basis and literature review,which combs the relevant theories and literature research results of equity structure and debt financing performance,and constructs the theoretical and literature basis for this paper’s research.The third chapter compares and analyzes the equity structure of Chinese and American enterprises to identify the characteristics of Chinese enterprises’ equity structure.Based on the understanding of the characteristics of equity structure in Chinese enterprises,this paper analyzes the impact of equity structure on enterprises.Based on the analysis of equity structure effects in Chapter 3,Chapter 4 studies the ways in which equity structure affects debt financing performance,uses mathematical methods to derive the impact of debt financing efficiency on response to litigation,and constructs an analytical model to derive the mechanism by which corporate equity structure affects corporate debt financing performance.Chapter 5 takes Chinese A-share and American listed companies as samples,selects their debt financing related data from 2011 to 2020,and measures and evaluates the debt financing efficiency and debt financing governance performance of the sample companies.It also compares and analyzes the debt financing performance of Chinese and American listed companies,and analyzes the actual situation of debt financing performance of Chinese enterprises.Based on the debt financing efficiency of sample companies measured in Chapter 5,Chapter 6 uses the Tobit model to empirically test the impact of equity structure on debt financing efficiency,and compares and analyzes the impact of equity structure on corporate debt financing efficiency of listed companies in China and the United States.Based on the impact of debt financing scale on corporate overinvestment evaluated in Chapter 5,Chapter 7 empirically tests the impact of equity structure on debt financing governance performance by constructing a model,and compares and analyzes the impact of equity structure on debt governance performance of listed companies in China and the United States.Based on the above analysis results,Chapter VIII proposes suggestions for Chinese enterprises to optimize their equity structure,improve their debt financing performance,and reduce the level of debt financing risk.Based on the research in this paper,the following conclusions are drawn:1.China’s enterprises have a relatively high level of debt financing and accumulated debt risks.An important manifestation of debt risk is the low performance of corporate debt financing,and long-term development will worsen corporate debt risk.At the same time,China’s enterprises have a high degree of equity concentration,a weak degree of equity checks and balances,and a low proportion of senior executives’ shareholding.The state-owned nature of the largest shareholder in an enterprise has a broad impact on enterprise operations.The equity structure will ultimately affect the performance of enterprise debt financing through various channels.2.The weak debt financing performance of Chinese enterprises is reflected in two aspects.On the one hand,from the perspective of input and output of debt financing,the debt financing efficiency of sample companies showed a downward trend between 2011 and2020.Compared with American enterprises,the debt financing efficiency of Chinese enterprises is relatively low.On the other hand,the external governance effect of corporate debt financing in China is not ideal,and the scale of debt financing lacks the ability to inhibit excessive investment by enterprises.3.The equity structure of enterprises has an impact on the efficiency of debt financing.The characteristics of equity structure represented by equity concentration,equity balance,and the ownership attribute of the first largest shareholder are significantly related to the efficiency of debt financing.The sample empirical test data shows that the state-owned equity attribute of the largest shareholder weakens the efficiency of debt financing,and an increase in equity checks and balances is conducive to improving the efficiency of debt financing.Equity concentration is weakly negatively correlated with debt financing efficiency.4.The ownership structure will affect the external governance performance of corporate debt.The higher the concentration of equity,the lower the performance of debt financing governance,while exacerbating the adverse impact of increased debt scale on debt governance performance;Strengthened checks and balances between shareholders can help improve the governance effect of debt financing,while strengthening debt checks and balances can alleviate the adverse impact of increased debt financing scale on debt governance performance;The relationship between executives’ shareholding ratio and external governance of debt financing is not significant.The state-owned equity attribute of the first largest shareholder has a significant impact on debt financing governance performance.The state-owned capital attribute of the first largest shareholder will exacerbate the adverse impact of debt scale improvement on debt governance performance.