Research On Impact Of The Capital Structure On The Growth Of Listed Companies

The growth of a company is the representative of its development potential and space,which can reflect the growth prospects of the company.It is not only highly concerned by relevant stakeholders,but also very important to measure the overall economic development situation of the country to a certain extent.The development of enterprises is inseparable from the support of capital,so the capital structure of enterprises has a significant impact on the growth of enterprises.Different financing methods and the proportion of capital raising determine the different capital structure of enterprises.The development of enterprises should balance the proportion of equity financing and debt financing and choose the capital structure suitable for their own development,so as to promote the development of enterprises and improve their value.However,in the development process of a company,it will go through many different stages.In each stage,the internal and external environment of the company is greatly different.Therefore,this paper studies the impact of capital structure on the growth of the company from the perspective of enterprise life cycle.In the development of an enterprise,the capital structure and growth of a company have mutual influence on each other.Not only will the capital structure have an impact on the growth of the company,but when the growth of the company changes,the managers of the company will adjust the capital structure correspondingly,which makes the endogenous influence between the two exist.This paper uses instrumental variables to eliminate endogenous effects so as to further explore the relationship between capital structure and corporate growth.This paper selects financial data of all a-share listed companies from 2008 to 2017 as research samples.Using the cash flow portfolio classification method,the samples are divided into three stages according to the enterprise life cycle: growth stage,maturity stage and decline stage.Then,this paper selects 10 financial indicators from the four aspects of the enterprise's profitability,development ability,operation ability and investment income ability,and uses the principal component analysis method to obtain the comprehensive growth score.Then,this paper takes the comprehensive score of growth as the explanatory variable,the asset-liability ratio as the explanatory variable,and the net interest rate of sales,the period expense ratio and the company size as the control variables to build the research model.Then,this paper substituted the sample data in the above variables,adopted regression analysis,established a multiple linear regression model,and conducted empirical analysis in each sample database.In order to clarify the influence of capital structure on the growth of a company,this paper also uses instrumental variables to eliminate the influence of endogeneity among variables.Finally,this paper draws the following conclusions: First,there is a significant correlation between the capital structure of an enterprise and its growth,and the relationship between the two will change from the perspective of life cycle.Second,when an enterprise is in the growth stage,there is a significant negative correlation between asset-liability ratio and growth,that is,excessive debt will hinder the development of the company to some extent.Third,when an enterprise is in the maturity stage and the recession stage,the asset-liability ratio and growth rate have a significant positive correlation,that is,appropriate financial leverage plays a significant role in promoting the development of the enterprise.Fourth,endogeneity has no significant impact on the relationship between asset-liability ratio and growth.