Study On The Relationship Of Capital Structure And Financial Performance Of Chinese Listed Companies

The theory of capital structure of corporation have become hotspot subject in securities business since 1958° The theorem of MM point out that the capital structure of company is not correlated to the value on market of company under the condition of no cost of trade, no duty and dissymmetry information. The theorem of MM only describe an ideal condition. Since 1960s to 1990s, legionary scholars have developed the theorem of MM forward on theory. These fruits of research indicate that the market value of company is close correlated. Moreover, there are many scholars discuss the problem of financial performance of corporate capital structure.This thesis mostly take the relationship of capital structure and financial performance of Chinese listed companies as research object, discuss the effect of capital structure of Chinese listed company to capital perform from two angles of theory and demonstration. Firstly, it analyze the relationship between capital structure and financial performance on theory. Capital structure including equity structure and debit structure effect governance of companies, they decide financial performance of corporation through corporation governance structure, they will form a relationship of logical chain, and performance and value is counteractive to the forming of capital structure. Mode of corporation governance of capital structure include English-American mode , Japanese-German mode and institution investor leading corporate governance mode, there is trend of using for reference and fuse each other in all modes.. The adequacy equation between equity structure and debit structure in capital structure will form the best capital structure. In this time the level of financial performance is the best. Secondly, we take a demonstration analysis to the relationship between capital structure and financial performance through financial dates of Chinese listed companies from 2001 to 2003. The results of analysis indicate: the holding proportion of first large shareholder of Chinese listed company is negatively correlate to financial performance of company, thestate-owned character of first large shareholder and degree of concentration is negatively correlate to financial performance, the proportion of state-owned share is negatively correlate to financial performance, the proportion of circulating shares is positively correlate to financial performance Rate of debit on assets, debit structure, scale of asset and growing are positively correlate to financial performance. Lately, we take a explanation of institution and theory to actuality and cause of capital structure of Chinese listed company and effect of them to financial performance. Moreover, we offer 6 suggestions of perfecting capital structure and improving financial performance of Chinese listed companies 0 Lastly, we point out the lack of research correlative problem in this thesis and problems needed more forward discussing in future ?...