The Empirical Study On Capital Structure And Management Performance Of The Steel Industry Listed Companies In China

The listed companies, which have reasonable capital structure, are in favor of strategic investment by the affected governance structure, further standardizing behavior of management and improving management performance. The benefits of steel industry in China is not obvious and the resources are not reasonable allocated,because of the unreasonable debt financing structure and the unduly concentrated stock ownership, which will restrict the management performance to be improved. After the financial crisis, when all steel companies in the world will face the unprecedented and huge challenge, as the pillar industry, how to adjust the capital structure of steel industry to make it reasonable, which will improve the management performance and promote the development of steel and iron industry, have greatly real economic significance. This paper attempts to research the relationship between the capital structure of listed companies in the steel industry and management performance, and give advice about how to adjust the capital structure to maximize the management performance on the basis of empirical analysis results.This paper research the relationship between the capital structure and management performance of steel industry listed companies in China, by using of factor analysis and regression analysis, and the research work as follows:First of all, summarize the status quo of the domestic and foreign literature, which study the relationship between capital structure and management performance, analyse problems in the current domestic research, and give the research method and frame structure aimed at those problems.Secondly, do the empirical study by panel data econometric model combined with the characteristics and developmental status quo of steel industry in China on the basis of factor analysis, namely do factor analysis of the 15 indexes, which include of the profitability, the developmental power, operation ability and debt paying ability, determine objectively the economic significance factor and comprehensive factor by computing their rate of contribution as weight. Finally, do the analysis of multiple linear and nonlinear regression model, which take the 2005-2009 panel data of 30 companies listed before 2005 in steel industry as object of study; comprehensive factor of management performance as dependent variable; state shares percentage, tradable shares percentage, ownership concentration 1, ownership concentration 10, debt to asset ratio, long debt to asset, current asset to total asset as independent variable; asset size, executives share, cru price index as control variable, after variable descriptive statistics analysis.The conclusions of this paper are as follows:(1)The long-term and short-term liabilities and management performance are negative correlation, the negative effect of short-term liabilities is more clearly; (2) The debt to asset ratio and management performance is significant quadratic curve relationship, and it is in the stage of negative correlation; (3) The ownership concentration1 and management performance is significantly positive; (4) The state shares percentage and management performance follows u-shaped curve, and it is in the stage of positive correlation.According to the results of the empirical analysis, give advice from microcosmic and macroscopical plane, combined with the status quo of listed companies in steel industry to rationalize the capital structure and improve the management performance. From microcosmic plane:(1) properly reduce the debt ratio, combined with the characteristics of steel industry; (2) enhance the percentage of major stockholder effectively. From macroscopical plane:(1) develop the bond market of steel enterprises; (2) properly reduce the percentage of state-owned shares, expanding the percentage of non-state-owned shares; (3) improve and perfect the bankruptcy system.The primary contribution of this paper:using the comprehensive index of management performance, determined by factor analysis, which has overcome the limitation of single index or simple-weighting grading; The regression analysis uses panel data econometric model, which synthesized the information of cross-section data and time series data, to make the estimate result of regression accurate and valid; using multiple linear and nonlinear regression model can reflect the influence that the listed companies in steel industry to their management performance accurately from multiple perspectives, and it has a referential significance to the development of listed steel companies in future.