Research On The Capital Structure And Corporate Governance Performance

China is a market economy in transition, so research on the governance effects of capital structure and the structural changes of governance effects in the transition process is of great significance, on the one hand, it can provide guidance on improving the financing structure for the enterprise, and improving the governance performance, on the other hand, it also provide reference to improve the efficiency of markets.This paper used the Shenzhen A-share listed company data to make an empirical analysis on governance effects of China’s company capital structure. First,the article conduct a test on the exists of capital structure governance effect, the results show that our corporate governance effects of capital structure does not exist in general, and even brought a negative impact. However, when companies are in a certain range of liabilities, the governance effects of capital structure does exist, beyond this range then there is no governance effect of capital structure, governance, reversely,there will a negative impact on corporate performance, the more high the debt ratio, the greater the negative impact on corporate performance. We also found that the proportion of companies which have governance effects is small, indicating that most of the companies may not have governance effect of capital structure o, which to some extent provide explain that China’s capital structure of effects does not exist in general.In this paper, we also studied the structure changes of governance effects of capital structure and found that the governance effect of China’s company capital structure does change, but change is in the negative direction, the process of economy transformation did not improve the governance effects of capital structure, On the contrary, further weakened the governance effect of capital structure, this paper have discussed the possible causes.Finally, the article gives the findings of this study and the corresponding policy implications that through promoting the reform of the banking system, improving the efficiency of the banking system, to accelerate capital market development especially the bond market development and improving the legal system and establish a reasonable mechanism for debt service, the rational allocation of credit resources and other means to promote the enterprises to optimize capital structure and improve corporate governance performance.