The Empirical Study On The Relationship Between The Capital Structure And The Performance Of The Listed Companies In China

The research of the relationship between the capital structure and the performance of the listed companies in our country is the outcome of the development of our economy. With the development of our market economy and the standardization of the companies' rules, the research of the relationship between the companies' capital structure and the performance becomes the focus of the theoretical research and practical research.Modern theories of capital structure indicated that the change of capital structure would influence the company's performance in an effective stock market. Companies can benefit more from liabilities financing than from equity financing. Capital structure of listed companies has testified this. This paper is designed to find out whether the capital structure of sample companies affects their performances. We also want to check the view that capital structure and firm performance are positively related in a definitely range. Maybe it can reflect the efficiency of our stock market.The study on listed companies is much more important than on non-listed companies since the operation and management of listed companies are more standardized according to theory of capital structure and capital of them comes from the capital market. This paper chooses companies of manufacturing, wholesale & retail, technology and logistics listed in Shenzhen stock market for research to eliminate the influence from industry classification and make performance of variable companies more comparable. This paper uses liability-asset ratio to describe the capital structure of sample companies;Comprehensive Performance is used to describe the performance of sample companies. Through the statistical analysis of the above 4 industries we found that performance of sample companies during 2002 to 2004 has negative relation with its capital structure.The paper has five chapters: The first chapter generally introduces the study significance, the background of the paper, the study area ,the study method, and the structure arrangement;The second chapter are theory basis and literature analysis, introducing the relative theory on capital structure and the performance and relative empirical literatures;The third chapter is empirical analysis, defining the samples to study, choosing corporate performance and capital structure index, bringing up study hypothesis, establishing empirical model, drawing the empirical theory, analyzing theempirical result;The fourth chapter are policies and advice, giving advice on how to optimize the capital structure and the performance of the listed companies in our country;The five chapter are innovation and deficiency.