Research On The Impact Of Capital Structure On Corporate Performance

The issue of capital structure is a hot topic in contemporary economics.Capital structure theory also plays an important role in the operation and development of the company.Whether a GEM listed company can choose the right capital structure plays a crucial role in improving company performance.Different from the main board and small and medium-sized board market,the GEM market is dominated by “high-tech,growth,small and medium-sized” enterprises,and focuses on the company's innovation capabilities,business methods,and technical level.Although foreign scholars are more mature in the study of capital structure related theories,because China's capital market has objectively different economic systems and historical backgrounds,foreign theories cannot be completely used for the development of China's market,and can only be used as a reference for experience.Therefore,it is necessary to study the issues related to the capital structure of China's GEM.Based on the above analysis,this paper takes China's GEM listed companies as the research object,and focuses on the impact of capital structure on the performance of China's GEM listed companies,thus providing reliable theoretical guidance for enterprises to choose a reasonable financing method and steadily improve the company's value.Based on the previous research results,this paper starts from the theoretical and empirical aspects.Firstly,based on the 1125 sample companies and related data of China's Growth Enterprise Market from 2013 to 2017,using Principal Component Analysis to screen out six indicators to build the GEM.The performance evaluation system of listed companies;secondly,the multiple regression model is used to analyze the impact of capital structure on company performance;finally,the conclusions are summarized based on the empirical results and relevant recommendations are put forward.The study found that: in China's GEM capital market:(1)both the company's debt structure and equity structure can have a significant impact on company performance.(2)In terms of debt structure,reducing the proportion of debt can improve the performance of China's GEM listed companies,but with the fixed asset-liability ratio,the increase in current debt ratio will help improve company performance;The company's scale has grown steadily and improved.(3)In terms of ownership structure,the higher the concentration of equity,the better the company's performance;the change of management shareholding ratio and the proportion of state-owned shares can not have a significant impact on the company's performance;reducing the proportion of shares outstanding can have a positive effect on company performance..This paper argues that enterprises should give priority to internal financing methods,secondly adopt equity financing methods,and finally adopt debt financing methods,which is inconsistent with traditional prioritized financing theory.China's GEM listed companies should try to reduce the proportion of debt financing,so that enterprises can develop steadily.