Research On The Relationship Between Capital Structure And Performance Of SME Listed Manufacturing Companies

Since1958，Miller and Modigliani put forward the MM Theory, therelationship between the company’s capital structure and performance hasnever stopped being explored by domestic and foreign scholars. ModifiedMM Theory thinks,the debt financing can save tax for the company andcompany performance can improve with the increase of the debt ratio inthe company’s capital structure.The trade-off theory thinks that along withdebt financing’s tax savings for the company, the cost of the company’sfinancial predicament is increasing. For the relationship between thecompany’s capital structure and performance, the scholars have carried onimmense amounts of research using different methods from differentangles. It concluded that the relationship between capital structure andperformance is a positive correlation, a negative correlation or an unfixedrelationship.In view of the differences between the SME market and the mainmarket, this article has chosen the SME listed company to be a researchobject. In the SME market, different industries have different degree ofdevelopment, however, the development of the manufacturing sector isthe fastest, the number of listed manufacturing companies is the largest,so this article kept the listed manufacturing companies on the SME out ofthe study.This paper first describes the background, research significance, research content and research methods, and then it has a review of theliterature at home and abroad on the capital structure and performance.The third part of the article is the analysis of the listed manufacturingcompany’s capital structure and performance on the SME.The fourth partis the empirical part. This paper takes102listed manufacturingcompanies on the SME as a sample, the capital structure (asset-liabilityratio and current liability ratio) as independent variables,14indicators ofcompany performance which can reflect solvency, operating capacity,profitability, development ability as the dependent variable, the scale ofthe company’s assets and the ratio of independent directors as a controlvariable，build a regression model，Regression model shows that theasset-liability ratio of the manufacturing companies on the SME in Chinagenerate negative correlation impact on performance;the current liabilityratio generate negative correlation impact on performance.The fifth partis the conclusion of this article.Consolidated the third and the fourthparts,this paper concludes that the capital structure of listed companieson the SME in China is very unreasonable, and it generates negativecorrelation impact on performance. Consolidated third and fourth partscome to the full text of conclusions...