An Empirical Study On The Impact Of Commercial Bank's Capital Structure On Its Operating Performance In China

With the full opening of Chinese finance industry, foreign banks will bring unprecedented competition pressure to the commercial bank in China. So improving our commercial bank's operating performance is very important to invincibility in the competition between the banks.According to modern capital structure theory, the capital structure will have an impact on enterprise value. As a special enterprise, because of its currency products, commercial bank's capital structure is also very special, and its capital structure's impact on operating performance is also different from other industry.In this paper, profitability, liquidity and safety standards to measure the level of commercial bank's operating performance and according to "International Convergence of Capital Measurement and Capital Standards"("Basel Accord" for short) to definite commercial bank's capital, discuss what is the impact of the commercial bank's capital structure on its operating performance. The impact occur through two ways: a direct impact on the cost of capital, the other is the indirect impact by influencing corporate governance structure. In this paper, first, analyzed this two kinds of impact on qualitative manner, then with the latest data of the commercial banks in China for evidence samples tested the degree of the impact in our country. The conclusion is that capital structure is significantly affect operating performance of the bank overall. But the effect of individual factors is not particularly significant. Finally, through discussing the conclusion of the empirical study, the policy of optimizing the capital structure of the commercial banks in China is recommended.