Rescnrch On The Impact Of Debt Financins Upon Coi Porntc Performance On Listed Steel Company

In recent years, China’s iron and steel industry is facing the grim situation of speeding upthe adjustment of industrial structure and increasing energy-saving emission reduction efforts.Bigger and stronger has become a prime target of development strategy for iron and steelenterprise. Industry mergers and acquisitions have been increasingly fast. With the increase ofglobal steel production and the shortage of iron ore, coal and other resource products, theprices of raw materials continued to rise. The continuous expansion of production capacityand the increasingly fierce of market competition have made the iron and steel product pricesin the doldrums. The increasingly cost and oversupply of steel production capacity have madethe iron and steel enterprises’ profit space narrowing gradually. The iron and steel enterprisesbeing in a dilemma need eagerly to find a road of development. Therefore, combining withthe public company’s overall financing situation of China’s iron and steel industry, this paperhas made a comprehensive and systematic study on the public company’s debt financing ofChina’s iron and steel industry and its influence on the performance of enterprises, which isbeneficial for reducing the financing risk and cost of China’s iron and steel enterprises andmaking the sustainable development of China’s iron and steel enterprises, but also hasimportant practical significance for improving the performance level of the iron and steelindustry in china.This paper attempts to use empirical methods to test the impact of China’s iron and steelindustry public company’s debt financing on corporate performance, and put forward thereasonable arrangement of debt financing structure and the policy suggestions of improvingthe performance. This paper’s research methods are as follows. Firstly, research frameworkand ideas of this paper are put forward by reviewing the related literature at home and abroad.Secondly, on the enterprise performance and debt financing are defined, established the paperwill examine the debt financing structure theory based on enterprise performance from threeaspects of the level of debt financing, debt maturity structure and debt source structure. In thesample selection, in order to avoid the influence of fluctuation of Sample Firms debtfinancing structure of research results, from2005December31listed in Shanghai Stock Exchange recently, selected A shares of steel industry listing Corporation, from2006to2011six years of data as the research object, the sample excluding delisting, ST and financial datais not complete with when the32listing Corporation, finally get192effective sample size ofthe study. Then, from the debt level, debt maturity structure and debt source structureinvestigate China’s iron and steel industry listing Corporation from2006to2011six years ofdebt financing structure. According to the statistical data of listing Corporation in China Ironand steel industry by using principal component analysis method to draw the comprehensiveperformance factor considering the performance level of iron and steel enterprises in China,finally using multiple linear regression to empirically test the impact of China’s iron and steelindustry listing Corporation debt financing structure on corporate performance. Theconclusions of this paper are as follows:(1) China’s iron and steel industry listing Corporation’s overall debt financing level is high and rising year after year. There is significantly negativecorrelation between the ratio of assets and liabilities and corporate performance.(2) theshort-term debt ratio is positively correlated with corporate performance, long-term debt ratioand corporate performance is negatively related to.(3) Bank credit ratio and corporateperformance was significantly negative correlation, commercial credit ratio and corporateperformance was significantly positive correlation. The innovation of this paper: firstly, on thesample selection, selection of China’s iron and steel industry as the research industry is animportant supplement to the study on the debt financing structure and corporate performance;secondly, through the principal component analysis establishing comprehensive evaluationof enterprise performance indicators to fully reflect the business performance levels.