The Empirical Research Of Capital Structure Affecting On Company Performance In Non-ferrous Metal Industry

At present, China is an important economic transition period, various economic contradictions is intensified with the emerging of the economic slowdown, inflation, resource price distortions and other issues. If we want to solve the problem reasonably and properly, we should accelerate the transformation of economic, adjust the economic structure and develop the strategic emerging industries. Non-ferrous metal industry is an important basic raw material industry, which plays an important supporting role in strategic emerging industries such as energy saving, high-end equipment manufacturing and information technology. In October2010, the State Council issued a document of the decision to speed up the cultivation and development of strategic emerging industries, required to accelerate the seven strategic emerging industries such as energy saving and environmental protection. This document provides policy support for the development of non-ferrous metal industry. Then the empirical research of the relationship between the capital structure of the Non-ferrous Metals Industry and its corporate performance, which has an significance practical guiding effect on how to optimize the capital structure, ownership structure to maximize enterprise value for Jiangxi Province even the country’s non-ferrous metals industry. At the same time, this paper also has some academic value because of enriching the theory of capital structure and ownership structure theory to some extent.On the basis of summarizing domestic and international research of the relationship of capital structure and corporate performance, this paper mainly divided into three parts described. The first part analysis the status of non-ferrous metal industry and its capital structure, and come to the capital structure features of the nonferrous metals industry such as asset-liability ratio fluctuations, high concentration of ownership and the ratio of short-term debt is larger than the ratio of long-term debt. The second part is the core, the paper selects the relevant data of30listed companies in the non-ferrous metal industry during2007to2011as samples, it has total150valid samples’panel data. The dependent variable selects the Tobin Q value on behalf of the company performance in this paper, the independent variables select the asset-liability ratio to reflect the debt structure, select the ownership concentration (the sum of the top five shareholders’ownership proportion and the sum of squares of the top five shareholders’ownership proportion) and the nature of equity(the stake shares of state-owned, the stake shares of corporate ownership, the stake shares of outstanding ownership) to reflect the ownership structure. This paper selects the growth rate of total assets as the control variable. Then the paper puts forward five assumptions according to China’s national conditions and characteristics of the non-ferrous metals industry. After that the paper conducts descriptive statistics of the variables in panel data through EVIEWS6.0. And we distinguish the existence of multi-col linearity according to the correlation test. Finally we use the generalized least squares estimation method to estimate the established fixed effects model. We obtained the regression results as follows:There has a negative correlation between the asset-liability ratio and business performance, financial leverage does not work well; the ownership concentration plays a reverse role in the non-ferrous metal industry enterprise performance, means that the relative equity concentration is not conducive to corporate governance and corporate performance in China; the correlation between the proportion of state-owned shares and corporate performance is negative, the correlation between the proportion of outstanding shares and company performance is positive.At the same time, the relationship between the total assets growth rate and firm performance was not significant. The third part gives the relevant recommendations of how to improve business performance through optimizing capital structure of the nonferrous metals industry, such as developing the bond market vigorously and optimizing the debt financing methods; continuing to promote joint-stock reform and optimizing its ownership structure; strengthening the related enterprises’ technological innovation and enhancing the core competitiveness.