Empirical Study On The Interactive Relation Between Capital Structure And Corporate Profit Of Property Listed Companies

The interactive relation between capital structure and corporate profit is examinedthrough the overall debt structure, debt maturity structure, and debt source structure by usingthe fixed model and simultaneous equation with the unbalanced data of Chinese propertylisted companies from 1998 to 2004. The result shows the capital structure has the interactiverelation with the corporate profit, no matter through overall debt structure, debt maturitystructure and debt source structure anglicizing the current or the lagged data of the capitalstructure. The relation is different in different period. The profitable enterprises use more debtfor enough interior funds. The choice is uncertain to the debt maturity, but the enterpriseshave the different preference to the different source of debt. The differences among debt level,debt maturity, and debt source result in different corporate profit. The government role ofcapital structure doesn't work as expected. The overall debt structure, debt maturity structureand debt source structure are affected by traditions to certain extent. Compared with the samesectors in other developed and developing countries and region, the level of debt of Chineseproperty listed companies is relative high, and the level of corporate profit is relative low.