An Empirical Study On The Impact Of Debt Financing On Corporate Performance

Debt financing is an important corporate finance manner, and it directly impact on capital structure. The capital structure not only related to the capital cost, financing decisions and but also related to corporate governance structure, corporate performance. With the development of the capital markets, the content contained by the capital structure theory is also richer. China’s capital market has been leaps and bounds in recent years, but the development of capital markets is unbalanced, which is in seriously lagging behind in the development of bond markets. The current situation and other factors of the China’s capital market development result that the China’s corporate debt financing ratio is low and debt financing structure is irrational. Debt financing in our country not only does not improve corporate governance structure and improve corporate performance, but has a negative impact on corporate performance. By this paper, I hope people realize the importance of the debt financing and debt financing structure, improve the structure of our financing structure, strengthen corporate governance through debt, and ultimately achieve the goal of improving corporate performance.This article draw on domestic and foreign debt financing research literature, which based on the theory of debt financing and combines with debt financing current situation and its causes in China, and so as to study the impact of the debt financing on corporate performance. First, build a comprehensive performance indicators F by using principal component analysis to reflect the company’s performance. Second, study the descriptive statistical analysis of samples, including the asset-liability ratio distribution statistics, the company’s asset-liability ratio statistics, corporate debt financing structure statistics and company performance statistics. Then, regard the company integrated performance F as being interpreted variables, serve asset-liability ratio, current liabilities rate, long-term debt ratio, short-term borrowings to total assets ratio, long-term debt to total assets ratio, the proportion of the total assets of the commercial credit as the explanatory variables, and respectively regression analysis.The empirical results show that there is a significant negative correlation between corporate performance and asset-liability ratio of the listed companies in China and a negative relation between company performance and current liabilities rate, long-term debt ratio, which the relation of company performance and current liabilities is more pronounced; There are the negative correlation between Performance and bank short-term borrowings to total assets ratio, bank long-term debt to total assets ratio and commercial credit to total assets ratio, which the correlation of the corporate performance and short-term borrowing is the most significant. The article concludes with the relevant recommendations to optimize China’s capital market at last.The main contribution of this paper is:1. build comprehensive performance indicators F by principal component analysis to reflect the company’s performance, and eliminate the drawbacks of using a single financial indicator reflecting the company’s performance;2. this paper not only studies debt financing from the general, and but further analysis debt structure broken down by debt liquidity and sources. There are some inadequacies in this article, such as there do not deeper research by industry characteristics, and do not consider the national macro-environment, national policy and other factors.