Study Of Correlation Of Capital Structure With Performance In High-tech Enterprises Based On Quantile Regression

Capital structure functions on firm’s comprehensive performance by the efficiency ofcorporate governance, conveying useful information about business conditions forinvestors’ decision-making. With the characteristic of abundant investment, high risks andrich returns, high-technology listed company has a unique capital structure needingplentiful inputs during every stage in its lifecycles. Furthermore, the reasonable degree ofthe capital structure influences directly the corporate capital cost, market value andcompetence and financing capacity in the long-term. So this research about capitalstructure of high-tech listed companies is practically meaningful for the interactionbetween the firm and its stakeholders and sustainable performance improvement.By analysis on the classical theories of Agency and Trade-off, this paper proposedthat there exists an optimal rang of interaction between capital structure andhigh-technology enterprises performance. And the capital structure could be adjustedfurthermore towards ideal performance increasing space. Human capital assessed by fourindicators like ‘innovative capital’ is introduced as a new variable, and comprehensiveperformance is measured by three common factors like ‘profitable capacity’. Then quantileregression method is adopted to look for different impacts of each item in capital structuretowards enterprise performance under the different quantiles so as to select the best capitalstructure and optimal range of ‘both best’.Based on101listed high-tech companies’ data from2006to2009in China stockmarket, quartile regression result of the capital structure to the performance shows that:(a)the largest negative effects from the proportions of state-owned shares and tradable sharescome in the lower layer of high-tech enterprises performance;(b) the ownershipconcentration is positively related to performance under its0.5and0.9quantile;(c) thesensitivity of manager’s shares proportion and human capital variable are both lost;(d)both the long and short-term debt ratios on firm performance have significant negativeeffects;(e) corporate scale functions positively on performance. Finally to increase theenterprise performance, such suggestions are given as moderate reduction of state-ownedshares, maintaining a reasonable degree of ownership concentration, establishment andimprovement of incentive mechanism, widening capital channels, introduction of thehigh-tech industrial policy and other recommendations.