Empirical Study On Dependence Between Capital Structure And Business Performance Of Chinese Steel Industry Listed Companies

The effect of capital structure of corporation to value of company demonstrates that the company influence the structure efficiency of company by capital structure, then achieve the goals of financial performance. I tried to find out the variable of capital structure which obviously effect the financial performance by comparing the affects of every target, then optimize the capital structure of Steel industry and promote business performance. It is also the main target of the empirical study.The theory of modern capital structure indicated: Under the efficient marketing, the variety of capital structure will affect the value of company, but compared to Stockholder-financing, debt-financing is more useful to company. Under the less efficient marketing, the capital structure of development countries have proved this theory. This paper tried to find out if the listed companies' capital structure affect the companies' business performance and how does it works.This paper use tuobin's q, rate of total assets-revenue to reflect the business performance of listed company and use debt asset ratio, rate of short debt on assets, rate of long debt on assets, stock right degree of concentration, the holding proportion of fist large shareholder, rate of Circulation stock to reflect capital structure. I discovered that debt asset ratio has negative correlation to business performance and degree of concentration has positive correlation to business performance by linearing the date from 2003-2006 of 29 listed companies which listed before 2002. At last, some strategies are suggested for optimizing the capital structure of Steel industry and promoting business performance by explanation of the results of the empirical study.