Correlation Between The Structure Of The Operating Performance Of Listed Companies And Debt Financing

With the deepening of China’s economic reform, and maturing of the capital market,the company’s capital structure has become the focus of financial session research. Thecore research of capital structure has been focused on equity financing, while, theresearch of debt financing is relatively less. MM theory and signaling theory caused afinancial session on the importance of debt financing and debt financing, and morescholars research. The study shows that the role of debt financing to improve businessperformance, to increase the value of the company can not be ignored.Our current research of debt and business performance is basically related to thelevel of overall debt, the term structure, the type of structure. However, differentscholars have different conclusions. For instance, some studies suggest that debt has asignificant positive impact on the operating performance, while some studies suggestedthat the debt can not significant impact on the operating performance. Among thesestudies, the sample companies are almost selected from the entire market or a singleindustry. However, there is rarely taken into account of the impact of differentindustries. Only few studies to consider the differences among industry, and industriesare used as dummy variables. But this method can not get the specific impact of the debtfor each industry to its performance. I will select the empirical analysis of the financialdata of listed companies in three industries, which were different business model, and itwill get a clear impact of the company’s debt structure and performance.In the article, there is a literature on domestic and foreign debt, include the overallstructure, the term structure and the source structure. Then I introduce concept andtheory of debt as theoretical basis for this study. Based on the literature study andtheoretical research, the paper is selected manufacturing, retail and wholesale tradeListed companies of A share market. And I use the2008-2011financial data of thelisted companies in different industries to build a multiple linear regression model foranalyze the impact of the debt structure on business performance. Through empiricalanalysis, I receive the following conclusions:(1) The debt high overall level of businessperformance have a negative relationship, and the greatest impact on the manufacturingsector, the impact of the real estate industry minimum.(2) Current liabilities negativeimpact on the wholesale and retail industry and the real estate industry has a positiveinfluence on manufacturing performance.(3) Bank borrowings liabilities andmanufacturing performance for negative correlation, the higher the proportion of bankborrowings, the worse corporate performance. Finally, according to the findings, I putforward several suggestions, and hope that the control structure of debt financing for theenterprise could improve operational performance reference, and also providetheoretical support for our development of a variety of debt financing channels.