Research On The Relationship Between Capital Structure And Firm Growth Of Listed Companies On GEM

Enterprise growth refers to the development potential of enterprises,but also reflects the future value of the enterprise.Whether an enterprise has high growth depends not only on the current business performance and development quality,but also on its future growth ability.According to international experience,a company with high growth is often a core competitiveness of the development of the core embedded excellent financing capabilities,the former requires the company's unique development ideas,market-leading technology or superb management capabilities,while the latter reflected in the corporate finance strategy and the resulting capital structure.In practice,due to the development of enterprise internal core is often endogenous to the core competence of enterprises,development concepts and strategic decision-making,the outside world is difficult to make a reasonable analysis of its growth kernel based on information disclosed by the enterprise,which can only resort to the market The observable information-including price signals,financial indicators and major business events such as its growth prospects for a reasonable forecast and assessment.As an important complement to China's multi-level capital market,the GEM has provided financing channels and room for growth for many high-tech and innovative enterprises.As synonymous with new technology,new format and new technology,GEM companies often rely on their advanced development concept,advanced technology and efficient management to quickly occupy market share and burst into a strong momentum of development in a short period of time.However,these enterprises still need a steady stream of financial support in the development process,and most enterprises are in trouble because they cannot solve the thirst for capital.In this sense,how to achieve optimal capital structure through reasonable financing arrangement and financial decision,so as to obtain more efficient funds and support the growth of enterprises,is particularly important.In order to explore how the capital structure of GEM companies affect their growth,this thesis chooses the data of 708 GEM companies listed in 2014-2016 as the research sample.Taking the mean of the natural logarithms of the total assets at the end of the period as thestandard for measuring the size of the enterprises.The sample is divided into two categories:large-scale enterprise and small-scale enterprise.Scale of assets and liabilities and long-term debt-to-capital ratio are selected as explanatory variables,net profit margin(SNPR),period expense ratio(PD)Control variables,and from the profitability,operational capacity,investment income levels,the four dimensions of development capacity to build a GEM growth composite index of these variables return.In practice,this thesis selects 12 financial indicators as the basis for enterprise growth analysis,using the principal component analysis method to get GEM growth score sequence,in order to build a multiple linear regression model.The main conclusions of this thesis are: First,for the GEM,the level of corporate debt and growth is significantly and positively correlated;second,for the GEM companies,the larger the size of the enterprise is often conducive to the future growth of enterprises;thirdly,when the Z value of the early warning index is greater than the average,the ability of the sample companies to withstand the risks of financial and bankruptcy strong,companies in the financing and financial leeway more room,which can be more flexible based on the state of the business to take a better capital structure,thereby significantly enhancing the growth capacity of enterprises.When the Z value is less than the mean,it can be clearly seen that the impact of the corporate capital structure on growth has obviously dropped,and significantly less than the Z value is greater than the average;fourthly,the net sales rate and period expense ratio are also two important factors affecting the listed companies on the GEM.GEM companies should focus on improving profitability while reducing costs and controlling expenses.The results from the empirical point of view support for this article on the asset-liability ratio can increase the growth of the GEM business hypothesis.On the one hand,properly raising the level of debt can constrain the free cash flow of the enterprise and to a certain extent bind the hands and feet of the management,making it prudent to make policy decisions during its term of office,reduce excess consumption and transitional investment,and give full play to the role of debt supervision and control.On the other hand,the increasein the level of liabilities can generate interest costs,and this part of the cost can play the role of tax shield to help GEM companies to avoid taxes and reduce interest expenses,and to support them to raise their core levels of technology,research and development and personnel training competitive field.In addition,relative to equity financing,the appropriate debt-to-debt ratio can significantly reduce the weighted capital cost of enterprises and effectively reduce the overall financing burden of enterprises so that they can move forward in competitive markets.Therefore,when choosing a financing policy,enterprises should,in combination with the specific circumstances of their own enterprises,choose a reasonable level of liabilities.They should not only make full use of their liabilities but also exert their financial leverage while taking into consideration the various risks that debt financing may bring and try to avoid them risk,choose the level of debt that suits the development of the enterprise.