A Study On The Relationship Between The Liabilities And The Corporate Performance Of China's Private Listed Companies

Since the MM theory has been brought up, the capital structure is always the hot topic in the financial sector. In the past few years, the scholars have focused on the research about the capital structure and financing, but few of them have done some research on the relationship between corporate debt financing and performance of private enterprises. With the rapid development of the private economy, it has done more and more contributions to the national's economy, so it is significant to attention more the private economy. In this article, we choose the listed private companies as the subject, focusing on the contents of the debt financing related to capital structure theory, making the theory analysis and empirical analysis on the relationship between the debt financing and the company's performance and thus make some suggestions with the purpose of providing some supplements to the present's research.The article refers to both in and out's theory achievements, analyze the relationship between debt financing and performance firstly, then make some statistical analysis on our country's situation of debt financing. We choose the 174 A-share listed private companies in shanghai and Shenzhen exchange as the sample during the 2005-2008. The article constructs the in composite performance indicator in principal component analysis and make the empirical test on the relationship between debt financing and performance. The result suggests: (1) the relationship between debt financing and the performance was negatively correlated. (2) liquid liabilities and long liabilities were negatively correlated significantly and the liquid liabilities has the more effect.(3) the bank borrowings was negatively correlated significantly with the bond financing, the business credit has the weak negative influence on the company's performance.(4) the company's performance would make the negative influence to the financing decision in the coming two years.Finally, the article makes the attempt to analyze the empirical result, making some suggestions to optimize our country's listed private enterprises regarding the present situation for the purpose of providing some help to the listed private company's debt financing decision.