Research On The Effect Of The Financial Decision On The Product Market Competition Of The Listed Company

After the 1980s, the correlation of the firm's capital structure with product market competition was identified by some financial economists. This paper studies the influence of the financial decision to the firm's products competition, and introduces the internal capital market to the advanced discuss.At first, the paper gives an overall review of the development capital structure theory and the theoretical achievements of the product market competition school. And introduces the correlational theories of the internal capital market. Then the characteristics and reason of the financial structure and market competition is discussed. And the influence of the firm's capital structure decision to the products competition is analyzed. Subsequently, chooses the data of the listed companies to the empirical study. The main works of this paper are organized as follows:①We choose four financial index to measure the product market competition, acalculate each fluctuate index, and pick-up four competition factors by the factor analysis.②We classify the sample companies by whether have the short debt,long debt and balance debt, and study the groups'difference of product market competition by the independent samples t-test.③Based on the regression analysis of the financial variable and the product market competition, we also studied the different influence of the capital structure to product market competition when the internal capital market variable is introduced. Then, we studied the different influence of the companies that have the different internal capital marke type.We conclude the results of the empirical study as follows:①The indexes correlatively with the gross profit are the optimum to measure the product market competition.②Firm's capital structure is significantly and negatively related to the product market competition. High debt rate makes the firm less aggressive.③At a certain extent, the internal capital market can substitute the firm's financial behaviour. And it can influence the product market competition.At present, our country is in the economic transition period, and there are different characteristics in firm's financial structure and market competition. Therefore, studying the characteristics of the listed company's financial structure in our country and the influence of the financial structure to the firmm's products competition has an important realistic and theory value in advancing the reform of the state-owned enterprise and promote the healthy development of listed companies.