Study On The Correlation Between Capital Structure And Corporate Performance

Capital structure is a research topic which has major theoretical value and practical significance. Through the correlated variable which impact both capital structure and the corporate performance, and the data of the Chinese listed companies, establish the empirical model to analysis the correlation between capital structure and corporate performance .From the capital structure theory, the operation models and management measures of listed companies are more in line with the study characteristics of capital structure, we collected the listed companies as samples, in order to eliminate the industry factors which may impact capital structure and further affect the results of empirical analysis; to get comparability among the various listed companies, we choose one industry—telecommunications and computer industries to analysis.To test the correlation between capital structure and corporate performance according samples from 2004 to 2006 , this article used ratio of debit to asset to reflect the capital structure of listed companies, simultaneously, used the return on equity (ROE) and Tobin'Q indicators to reflect the corporate performance of the listed companies, And the empirical study showed significant negative correlation. At the same time, we obtained some other endogenetic variable characteristics from the study; we drew conclusions and explain together. Finally, we forward some policy proposal focusing on the results of the study.