Empirical Study On The Relationship Between Capital Structure And Enterprise Value Of Chinese Enterprises

Theory of capital structure is the core of finance theory and financial theory in modern company, which regards the relationship between capital structure and enterprise value as the fundamental starting point of the theoretical research, and explores the optimal capital structure exists or not and how to optimize capital structure and improve enterprise value. The study of capital structure theory abroad starting earlier, which has a lot of academic achievements now, has formed a set of relatively complete theoretical system providing a theoretical basis for western companies to optimize capital structure and pursue the maximization of enterprise value. In comparison, the domestic research is mainly on the basis of studying the western capital structure theory, and largely focuses on the empirical research level. It has not yet formed a set of capital structure theory system according to Chinese situation. There are significant differences between China’s special economic environment and western countries, and the actual situation of Chinese enterprise capital structure still subjects to inspect and improve, so the research of it has more realistic significance.Since most of the empirical research of Chinese scholars in specific industry or other specific object of the enterprise, failed to reflect the overview of the enterprise capital structure in China’s special economic environment, and the variable indicators are not changeable enough, less concerned liabilities internal structure index, this paper chooses listed companies of Shanghai & Shenzhen 300 Index as the research objects, which are representatives of the market and can reflect the specificity of the Chinese market better, and the conclusion will be more comprehensive. Besides, on the choice of capital structure index variable, this paper not only investigates the relationship between debt ratio and enterprise value, but also focuses on maturity structure and type structure of debt, studying more deeply. The analysis results will be full and accurate and have more significance.On the theoretical system, firstly, by explaining the three stages of early capital structure theory, modern capital structure theory, and new capital structure theory, research system of western capital structure theory is introduced. According to the main line—the relationship between capital structure and enterprise value, all the papers about the relationship between capital structure and enterprise value written by domestic and foreign scholars are summarized and reviewed, then the research direction is introduced; Secondly, the relationship between capital structure and enterprise value is theoretically analyzed, and this part puts forward the research hypothesis. When it comes to empirical research, this paper firstly describes the process of the empirical study and at the same time illustrates the sample selection process and data sources of the research, defines variables and sets models for the hypothesis mentioned above; then it takes listed companies of Shanghai & Shenzhen 300 Index as the research objects, conducts descriptive statistics and correlation analysis on the related variables of capital structure and enterprise value using the annual data of sample firms from 2008 to 2011 so as to describe the present situation and characteristics of the capital structure and enterprise value of listed companies of Shanghai & Shenzhen 300 Index in order to realize the general situation of Chinese enterprises’ capital structure and enterprise value; then it uses the data collected, takes indexes relating to the enterprise scale, operation ability and growth ability as control variables, uses multiple linear regression model for empirical research on the relationship between capital structure and enterprise value of Chinese enterprises from three aspects which are the ratio, maturity structure and type structure of enterprises’ debt; it finally conducts reasonable analysis on the results of the empirical study.The results of this study shows that: Capital structure measured by liability-asset ratio is positively correlated with enterprise value; current liability ratio is negatively correlated with enterprise value, while non-current liability ratio and enterprise value are positively correlated; there is no significant correlation between borrowing liability ratio and enterprise value, compared with negative correlation between commercial credit liability ratio and enterprise value. At the same time, this paper also founds some existing problems in terms of capital structure, i.e. the overall debt level of enterprises is slightly conservative and the debt maturity structure is unreasonable.