Research On Capital Structure Selection Of Private Enterprises Based On Product Market Competition

Based on the background of globalization,the competitive environment of enterprises is uncertain,and investors pay more and more attention to the control of investment risk and the growth of investment value.Taking into account the changes in these factors,the financial decisions of business managers have also changed,tend to have a flexible financial behavior.In such a real environment,companies choose a lower debt ratio,to a certain extent,must be able to save a certain degree of financing capacity for enterprises to retain a certain degree of financial flexibility to meet the uncertainty of future market competition and capture a variety of investment opportunities.According to the statistics of China Statistical Yearbook,we can see that the debt ratio of the majority of private enterprises in our country is low and is largely lower than the development level of state-owned enterprises.Why is it low? Is it just an external reason for financing difficulties under various factors? In such a fierce market,companies will consider the product market competition this factor? What kind of relationship between this factor and enterprise financing behavior? For enterprise,how to reasonably adjust the proportion of debt? Do private companies choose low debt to a certain extent in order to establish a competitive advantage in the fierce market competition and to retain financial flexibility,can it be verified? Private listed companies can be seen as representatives of private enterprises,with a typical demonstration role,so to strengthen the study of private listed companies,to a certain extent,the development of China’s private enterprises have a guiding and leading role.Academic scholars have confirmed the interaction between product market competition and capital structure.Different product market competition situation lead to that the enterprises have various market performance and financial behavior.The main research route of this paper is: Based on the perspective of product market competition,it mainly analyzes the impact of the enterprise’s capital structure from three aspects: the competitive environment of the product market,the degree of market competition and the market competition strategy.It mainly analyzes how the three factors of product market competition to affect the corporate financial decision-making behavior,the enterprise will be in what kind of competitive conditions to take a lower debt ratio.This paper chooses a listed company of private enterprises(which keeps the low debt financing level for a long time).Based on the three factors of market competition(market competition environment,market competition strategy,market competition degree),the paper analyzes the choice of capital structure,analyzes whether the choice of low liability is consistent with the previous theoretical analysis,and make a reasonable explanation for inconsistencies.At the same time,whether the case company maintains a low debt ratio of financial behavior in a certain period of time to obtain competitive advantage and financial flexibility to verify.Finally,this paper puts forward some suggestions on how to choose the capital structure of private enterprises in the face of competition in the product market.