An Empirical Study Of The Relationship Between China's Listed Companies Debt Financing And Firm Performance

Since1958, Modigliani and Miller theorem proposed by MM, the company's capital structure of international finance has been a hot issue in the study. The financial capital structure theory is an important component of the theory, it involves not only the finances of the business objectives, financing, financing costs and cash flow and other business of the governance structure of enterprise, have a significant inpact on the incentive structure. In recent years, the listed companies in China's capital structure, financing methods more and more attention by the majority of scholars, with the deepening of China's investment and financing system reform and improve capital market mechanisms, China's listed companies will have more financing channels to choose, the company financing structure shows a wide range of situations, but the scholars to pay more attention to equity investment, neglect the interests of creditors and creditors in corporate governance role. Especially for China's listed companies adopted the manner of debt financing debt financing and corporate performance study of interaction between one of the few.This article introduces the theory of capital structure, and then combined with my years 2005,2006,2007 financial data of listed companies to carry out empirical analysis, empirical analysis, China's listed companies and corporate debt financing is negatively related to performance, our listed companies debt financing is not in accordance with the classical theory of capital structure is expected to bring out the growth of corporate performance, in line with the actual situation of our country. This shows that debt financing of listed companies in China Effect of weak governance, which is bound by the current debt, "softening," a special stake in a listed company structure, the imbalance between development of the securities market, managers imperfect selection mechanism, "internal control" is a serious problem, such as factors.Finally, in the theoretical analysis and empirical research, based on the combination of the specificity of China's ownership structure is proposed to strengthen governance effects of debt financing proposals for the relevant reference, it is necessary to vigorously develop China's bond market, to strengthen the legal protection of creditors, further improve the China's hosting the banking system, improve the information disclosure mechanism to reduce the degree of information asymmetry. Active use of the signal role of corporate performance improve capital structure, strongly contributed to the debt financing and corporate performance cycle of positive interaction.