China's Listed Companies Capital Structure And Corporate Performance Correlation Studies

The most important issues in the studying area of corporate financing is the interacting relation between capital structure and performance. Many economists have raised different capital structure theories from different angles. There is no unique conclusion, but the main aim of this studying of the capital structure is to offer a theoretical explanation and prediction on the benefit conflict. The interacting mechanism of those who have contract relationship with each other and between the conflict and corporate performance is quite important.Most of China’s listed companies are state-owned enterprises, since the development of securities markets, the dominance led to internal pillage is very serious, and after the completion of the split share structure reform, how to maximize business performance for a reasonable capital structure has become the focus attention of the domestic economic circles. The research goal is to establish a reasonable model by using the existing historical data to find a reasonable business debt ratio.The whole dissertation introduces the theoretical and practical background of MM theory and representative models of the new capital structure theory. After making theoretical analysis of how capital structure influences corporate performance which is made by introducing different kinds of agency problems caused by incomplete contracts, this paper analyzes how capital structure influences corporate performance which is made through agency problems. The paper also summarizes domestic existing empirical studies while putting forward research direction. And after presenting situation of Chinese stock market, the main researched problem has been raised. Describe the creative points and research method. The paper collects financial data of Chinese listed companies of recent years; establishes simultaneous equation model and regression by3sls. Made into this conclusion which supports negative correlation between capital structure and performance. Then this paper made the analysis of negative correlation between debt to performance develops from governance and financial aspects. The paper also discusses the effects on debt governance which have been made by all-way circulation and new bankrupt law. At the end of this paper, there are suggestions which are given for optimizing capital structure and improving performance, such as hardening debt restriction, cultivating institution investors, optimizing state-owned stock share, and etc.