Research On The Relationship Of Capital Structure And Corporate Performance Of The Listed Companies In GEM

With the rapid development of the listed companies in GEM, capitalstructure is irrational and other issues will follow. Unreasonable capitalstructure is not conducive to the establishment of the corporategovernance structure or to play a governance mechanism, which is notconducive to improving business performance or a healthy long-termdevelopment. Against this background, this article will select electronicand equipment industry of listed companies in GEM in2010-2012asresearch object, normative and empirical analysis will be used to explorethe relationship between capital structure and performance.Firstly, research results and related theories on capital structure andcorporate performance are discussed at home and abroad, and then threehypotheses are proposed drawing on previous research results. Secondly,using descriptive statistics, factor analysis, correlation analysis, multiplelinear regression analysis and curve regression estimation methods toempirical analysis the relationship between capital structure and corporateperformance of electronic and equipment industry of listed companies inGEM, the results showed that:(1) The indicators reflecting the solvencyof companies have had a significant impact on the overall performance ofenterprises such as current ratio, quick ratio, equity ratio. Enterprisesshould pay attention to the rational use of debt.(2) Between the asset-liability ratio and corporate performance is significantly negativelycorrelated, indicating a low level of corporate assets-liability ratio, thefinancial leverage of enterprises is not be effectively played.(3) There isno linear correlation between the rate of current liabilities and corporateperformance, curve estimation analysis the goodness-of-fit of quadraticmodel and cubed model are very small and the analysis do not pass thetest of significance. The reason may be that the current liabilities aredifficult to translate into profits in the short term.(4) Between Long-termdebt to capitalization ratio and corporate performance is a significantnegative correlation, the reason is that the preferred method of financingof electronic and equipment industry of listed companies in GEM isequity financing, nevertheless, the proportion of debt financing is small,this single financing style will lead to consolidated cost of capital beingtoo high and can not help to improve the performance level of companies.Finally, based on our research findings and combine the characteristics oflisted companies in GEM, we will put forward a number of practicaladvice.