Study Of Bank Affiliates,private Debt Financing And The Company’s Performance

Private enterprise is an important part of the enterprise, Sustainable development of private enterprises has a positive meaning for stability in the country, For private business owners, the business development and progress depends on the capital, Therefore the financing of private enterprise is the core business problems. In the first part of this paper, we introduce the non-institutional factor of credit soft constraint,hope to understand its impact on private enterprise debt financing. According to the conditions of hard constraints on credit Kornai’s "Economics of Shortage," According to Kornai’s "Economics of Shortage," we know the conditions of hard credit constraints, andwe define the associated bank executives(corporate executives have engaged in banking industry) is a form of soft credit constraints. In this paper, we will analyze relationship between it and corporate debt financing through the means of empirical analysis, and to explore whether it can help alleviate the financial pressure on private enterprise, this is the first issue of this paper.In addition, corporate performance is an indicator of corporate focus, so the second question of this article focuses on the impact of association executives, debt financing on firm performance. As can be seen from the traditional theory of debt financing, debt financing is a double edged sword, on the one hand it can reduce agency costs, incentive management and the tax shield and so on, is conducive to corporate governance, to improve corporate performance; But on the other hand, increasing the debt will lead to increased financial risk, excessive debt, the firm has a high financial risk and bankruptcy costs, so debt financing will have a negative effect on corporate governance. In the second part of this article, the company will carry out the effect of debt financing for the empirical analysis, this paper will be subdivided into specific corporate finance bank loans and other financing, if a bank loan for a positive effect of governance, analysis of the reasons; if the treatment effect is negative, analyze their causes. Empirical results show that debt financing for private enterprise in corporate performance was a significant negative correlation. This shows that the debt financing of corporate governance has not been fully exert positive effects,the main reasons are: imperfect existing bank loan risk management mechanism in our country, imperfect corporate governance structure, governance role of debt leverage is lost.As a complementary study, in the third part of the credit-based soft constraints perspective of this article, we will analyze the relationship between the executive associate banks, debt financing and corporate performance. Analysis of the impact of the enterprise associated bank debt financing on corporate performance, empirical studies show that private enterprise debt financing on corporate performance was a significant negative correlation, but executives have an associated private banks, this negative correlation showed significant improvement.Conclusion: there is an associated private enterprise executives, which banks borrow more easily acquired, this non-institutionalized factor to some extent, help private enterprises to get more loans, ease financing constraints; now the company’s debt financing affect performance negatively correlated, but the non-institutionalized bank executives associated factors significantly improved this negative correlation, positive impact on the business performance.