Research On The Impact Of Corporate Performance Debt Financing Structure On Corporate Performance By Chinese Listed Companies

Equity financing and debt financing are the two main sources of corporate capital, and since they can impact the company performance, it is also considered the important way to improve business performance. Scholars have made a lot of research on the impact of equity financing on corporate performance, but ignored the study of effects of debt financing on corporate performance, and did not take into account that impacts of different debt structure on the company's performance are different. They only considered different debt structure as homogeneous, without any specific analysis. Therefore, this dissertation will discuss interaction mechanism of different debt structure on corporate performance respectively from the three aspects of overall debt structure, debt maturity structure and debt layout structure, analyze theoretically pragmatic utility of different debt structures of Chinese listed companies'capital structure on corporate performance, hoping to supply references for optimizing capital structure of listed companies and improving corporate performance.Western capital structure theory suggests that debt financing can not only exert functions of financial leverage and the tax shield effect to improve business performance, but also play roles of monitoring and stimulating management, reducing agency costs and information asymmetry, and optimizing allocation of corporate control power, resulting in promoting corporate operating performance. The paper will primarily describe theoretically the impact of overall debt structure, debt maturity structure and debt layout structure on corporate performance, then based on which the paper will empirically study data from CSI 300 constituent stocks companies from 2006 to 2008. Firstly, through descriptive analysis the paper finds that overall debt financing level of Chinese listed companies is not very high, and sample companies are apparently inclined to equity financing. Eighty percent of debt maturity structure of Chinese listed companies is short-term liability, and in debt layout structure, sample companies mainly depend on private debt like bank debt to make debt financing, and only a few listed companies issue public debt like corporate debt, which is contradictory to the Pecking Order Theory and financing experience of western developed countries. Secondly, through regression analysis, the overall debt financing structure and debt maturity structure are significantly negatively correlated with firm performance, while there is no significant correlation between the debt layout structure and corporate performance. Therefore, the debt financing structure of China's listed companies does not make a theoretical positive effect on firm performance. Finally, the paper combines with the reality to analyze the results of empirical analysis and give suggestions to help Chinese listed companies to fully make use of positive impact of debt financing structure on corporate performance to finally improve companies'performance, including rebuilding the relationship between banks and enterprises, improving company's debt financing structure, broadening company's financing sources, improving the bankruptcy system and establishing a professional manager market.