Research On The Impact Of Corporate Strategic Changes On Capital Structure

Power battery industry is a key link of the new energy vehicle industry chain,benefiting from the policy support,rapid growth.In 2014,the scale of the power battery market expanded significantly,with the number of newly registered power battery enterprises increasing by 70% year on year,and then increasing by 30% per year on average.However,when the fiscal subsidy policy significantly retreated,many power battery enterprises suffered from cash flow shortage,debt crisis and even bankruptcy.Nearly 2/3 of the power battery enterprises gradually withdrew from the market,the industry reshuffle intensified,and the fierce market competition eliminated numerous power battery enterprises.The key reason for the failure of the strategy is that the enterprises blindly enter the power battery industry and lack of strategic planning of capital.Capital structure is the key to the financial strategy of an enterprise,and the stable cash flow brought by proper capital structure is the guarantee for the long-term sustainable development of an enterprise.At present,there are abundant research results on enterprise capital structure,but few scholars analyze the causes of enterprise capital structure adjustment from the perspective of strategic change.EVE since 2014 into the power battery industry,at the same time,there is a significant adjustment in the capital structure.This paper takes EVE as an example to conduct a case study to analyze the impact of strategic change on the capital structure.Firstly,the literature and theories related to strategic change,financial strategy and capital structure are sorted out,and then the causes and ways of strategic change,financial strategy change and capital structure adjustment of the case company are analyzed.Finally,it analyzes and evaluates whether the capital structure adjustment can cooperate with the strategic change of EVE.The findings of this paper are as follows :(1)The substantial increase in capital demand caused by strategic change is a prerequisite for capital structure adjustment of enterprises;(2)The failure of the original capital reserves and government subsidies to meet the capital needs is the key reason for the change of corporate financial strategy;(3)Debt financing constraint is lower than equity financing and the existence of financial flexibility is the decisive factor for enterprises to increase debt financing,which eventually leads to capital structure adjustment;(4)A reasonable capital structure is a powerful guarantee for the smooth implementation of corporate strategic reform.The research value of this paper lies in that it enriches the related research on strategic change and capital structure by studying the mechanism of corporate strategic change on capital structure adjustment.In addition,E-Wei lithium energy is a typical representative of the traditional industry that successfully participates in the power lithium battery industry,which can provide a powerful reference for similar enterprises in the new energy vehicle industry.