Empirical Research On The Capital Structure Of The Listing Corporation Product Market In China

The 80 years since the last century, with the behavioral finance theory and asymmetric information theory has been widely used in financial research, industrial economics and finance scholars gradually pay attention to the relationship between capital structure and product market competition. The relationship between the capital structure and industrial organization two research has been widely attention of scholars around the world, and to carry out a series of studies and achieved fruitful results. Some scholars believe that in a perfectly competitive market enterprise, has a significant positive correlation between the intensity of competition on its own debt level and the degree of product market, namely the enterprise through the expansion of the scale of debt, strengthen the financial leverage utilization degree can enhance their comprehensive competitive strength, encourage enterprises to products on the market more attacking and erode force, so as to continuously squeeze rival. Some scholars think that excessive levels of debt will give enterprises Industry brings some negative influence, the enterprise in the high debt pressure in the product market for weak situation, cause its product competition intensity is low. Therefore, in view of the above research background, this paper will focus on China’s actual, to explore the relationship between the product market competition and capital structure of China’s listing Corporation.At present, our country is in the transition period of economic development, is the foundation of economic system reform, the development of the capital market is not perfect, the construction of listing Corporation financing mechanism to be perfect, unreasonable financing structure is more obvious. In the face of different competition in the product market, the financing behavior of enterprises is enhanced when the differentiated characteristics. The intensity of market competition, some enterprises will take more radical expansion of the scale of debt to deal with, but there are also business practices are more conservative, the initiative to reduce the debt ratio to maintain a more stable financial strategy to adapt to the highly competitive product market. Therefore, in view of the phenomenon of China’s capital market, the objective situation A shares of listed companies based on the financial data, calculated using its 1999 2014 Beh Finn de index (HHI) and market share (MARKET) index to Reflect the competitive strength of company product market, based on China’s current economic system conditions, expounded China’s listing Corporation of corporate capital structure and product market competition degree and the relationship between the two. Further, as the research category of the development, this paper attempts to explore the relationship between capital structure and product market competition between different industries. This paper argues that different industries listing Corporation its capital structure also has significant difference. Without considering the nature factors of industry, product market competition and capital structure is positively related. In addition, the three kinds of industry regression processing, can be found:high oligopoly industry showed a significant negative correlation. The product market competition and capital structure; low oligopoly industry and competitive industry product market competition and capital structure is positively. Relationship, but the competitive strength of the product market competitive strength of its capital structure is stronger than the positive impact of low oligopoly industry.To sum up, this paper argues that when the enterprise is facing the competition environment changes, the enterprise needs to consider the product market competition and industry quality factors, in order to develop the best financing strategy.