Empirical Study On The Relationship Between The Capital Structure And Financial Performance Of Agriculture-Listed Companies

China is one of the largest agricultural countries. The emergence and development of agriculture in China has ten thousand years of history. When seeing the changes from the slave, feudalism to socialism society, agriculture, the most fundamental industry in China, formed a development pattern with its own special profession characteristic in the operation and long process. Therefore, it certainly has research significance. Modern agricultural development relies on industrialization of agriculture, but agricultural industrialization cannot perform properly without the establishment of Modern Corporation system. The fact that Shengsheng bao (000019) and Liannong (now Tianchen 600620) were listed on the Shanghai and Shenzhen stock market in 1992 marks the date of birth of Agriculture-listed companies in China. After the 2008 global financial crisis, the world economy has entered into a period of adjustment, so the development strategy of companies of China, the country at an important stage of economic transformation and upgrading, and their capital structure changes accordingly. Under this situation, how to enhance the competitiveness of agriculture-listed companies and realize their financial performance efficiency has caused widespread concern in the community and has important research significance. Capital structure, which refers to the composition and proportion of company capital source, can be divided into equity structure and debt structure. Equity structure determines the allocation of the internal control of a company and forms the foundation of the corporate governance; debt structure affects corporate governance through binding the debt contract and bankruptcy mechanism. How to arrange capital structure plays a significant role for optimizing the corporate governance and financial performance. All in all, it has meaningfully theoretical and practical value that studying the relationship between capital structure and financial performance of Agriculture-listed companies in new economic situation.This paper presents a comprehensive descriptive analysis based on the data of Agriculture-listed companies from 2008 to 2012. The analysis consists of listing time, regional distribution, industry distribution, main business scope, company property, company size, government subsidies, expenditure on research and development, ownership structure, debt structure, financial performance. According to the mechanism of the capital structure on the financial performance of the listed company and agricultural situation, it puts forward six research hypotheses, establishes a measurement model for the relations between listing Corporation capital structure and the financial performance of agriculture by regression analysis.After the research, this paper draws the following conclusions:(1) the overall development of agriculture-listied Company is not respectable. The number of business is limited while the scale is minor. Some corporations operate in other industry other than agricultural. Among these corporations, around half of them are state-owned, and generally supported by the government subsidy to varying degrees. Since their scientific research is insufficient, they lack the ability of independent innovation. (2) Both proportions of state-owned shares and tradable shares are quadratically related to the financial performance which, however, is not obviously correlated to the corporate shares. (3) The relationship between the proportion of the first shareholder and financial performance is not significant. The proportion of top ten shareholders and financial performance is positively related. (4) The relationship between the level of equity incentive and financial performance is not significant. (5) The rate of assets and liabilities and financial performance of the ’two shape U’. (6) Their financial performance was significantly positively related to current liabilities ratio. (7) Their financial performance was significantly positively related to bank loan ratio. There is significant positive correlation between commercial credit rate and financial performance. (8) The relationship between firm size and financial performance is not significant. (9) The relationship between board size and financial performance is not significant.At present, agriculture-listed companies are still in the development process and there are some problems that hinder their performance improvement. This paper puts forward five countermeasures in order to optimize the agricultural capital structure of the listed company, provides some valuable suggestions to improve the financial performance, and assists agriculture-listed companies to embark on a healthy, sustainable track of development.