The Empirical Study Of Private Listed Company's Financial Leverage

In the recent years as the development of the capital market in china, the direct financing is increasing. But debt still plays an important part in corporate finance. In such circumstance, on the one hand, many enterprises still cannot view the role that financial leverage played with ration and objectivity; on the other hand, there are relatively fewer researches on this problem in china’s academic community. Thus, Empirical research methods will be used to focus on analysis of financial leverage effect on the value of enterprise in this article, from the perspective of governance mechanism, with a view to seeking governance mechanisms of financial leverage and provide reference for future academic studies.The governance mechanism between financial leverage and enterprise value is studied from two aspects of relations between financial leverage and investment scale as well as investment efficiency, utilizing private listed companies on the Shanghai stock market as sample for empirical study. After research we came to the following conclusions. Financial leverage can’t curb excessive investment in low-growth enterprises; the contraction between big and small shareholders has become a dominant governance problem in private listed companies of China; the governance effect of long-term leverage is not greater than the effect of the total leverage. Policy recommendations for these problems include the following three aspects which are optimizing governance structure of private listed companies; strengthening the governance role of creditors in private listed companies and improving the internal governance structure of private listed companies.Some creative work is made on the following aspects:on the one hand, this article explains the mechanism of the relationship between the financial leverage and the enterprise value on the basis of the predecessors’conclusions. On the other hand, empirical analysis is a main study method in this dissertation, and findings of each part are based on positive results and connected through logical reasoning.