The Research On The Interaction Of Product Market Competition And Financial Structure

In recent years, the combination of the theories of industry's economics and capital structure have produced the product market competition school of capital structure and made rich research achievements. The research and development of this field indicate that the decisions of the enterprise's financial structure are reasonable commercial choice on the basis of the product market competitive environment, the business strategy and the capital market environment, etc. There are close relations between the enterprise's financial structure and the product market competition. At present, our country is in the economic transition period, there are different characteristics in market competition and enterprise's financial structure. The reform of enterprises of our country is pushed into the depth, the market competition of the products is becoming more rational, the capital market is being perfect gradually, the financial derivations have been substantial developped and the enterprises have more financing channels. Based on the mentioned backgrounds, studying the characteristics of the listed company's financial structure in our country and the influence between the enterprise's products competitive environment and the financial structure has an important realistic and theory value in advancing the reform of the state-owned enterprises and promote the healthy development of listed companies.The paper studied the interaction between the product market competition and the financial structure, analyzed the main characteristics of the product market competition and the listed company's financial structure in the period of economic transition of our country, then propsed relevant recommendations. Besides the introduction there are four parts in this paper. The fist part reviewed the development capital structure theory, and overviewed the theoretical achievements of the product market competition school of capital structure. It is the theoretical foundation of this paper. The second part analyzed the characteristic of the main type market structure and its impaction on the enterprise's financial structure. And used the financial structure as the dependent variable, the index of market structure as the independent variables, choosed the sample industries' five years data, carried into the multiple linear regression. The results showed that the market structure has remarkable influence on enterprise's financial structure. The third part analysed the impaction on the enterprise's competitive strategy of the financial structure. Studied the financial structure's influence on the two mainly kinds of competitive strategies, which help realizing the enterprise's competitive strategy andimproving the enterprise's achievement. The last part studied the characteristics of the market competition and financial structure in the transition period. Utilizing the result of the above parts, proposed the judge standard of the rational financial structure in the market competitive environment and the relevant suggestions in optimizing the enterprise's financial structure in our country.