Corporate Governance Research Based On Capital Structure

The capital structure is the core content of the enterprise financing decision-making. It is the proportion of debt capital (B) and ownership capital (S). The whole market value of a company (v) is V=B+S. The capital structure has important internal relationship with corporate governance. From the point of view of the principal-agent theory, different capital structures have different effects on restraining manager's excessive investment, bestirring manager preferably, and urging company's constriction and liquidation. Therefore, it has important support that research corporate governance from the point of view of capital structure. The whole paper bases on the principal-agent theory, and firstly demonstrates the effects of the ownership structure, debt structure and other secondary factors on corporate governance and company performance in theory. Then, we use the method of multianalysis in analyzing the 2002's annals datum of the Chinese listed company, from three points of view of the ownership concentration, the character of the controlling stockholder and the proportion of shares. And set the Ratio of Liabilities to Assets index into control variables. We offer a policy proposal for improving the ownership structure according to the result of analysis. Our research indicates that the ownership concentration and structure have great effects on company performance: first, there is no a fixed relationship between ownership concentration and company performance, and the correlation is decided by market criterion and the law protect. Secondly, the performance of the company that social legal persons control is better than the performance of the state-owned company. The proportion of social legal shares has a positive effect on company performance. The proportion of state-owned shares has a notable negative effect on company performance. The research results indicate that social legal persons operate on corporate governance very much and the efficiency of state-owned shares is low. Thirdly, Ratio of Liabilities to Assets can signal the management status to matket, and has positive a correlation with the company's market performance. Based on the upper conclusion, we offer a proposal that realize the reduction of state-owned shares by transforming the state-owned shares to social legal person's stock and transforming the state-owned shares to debt. Both methods not only can improve corporate governance structure and company performance, but also settle the market pressure when non-circulation shares transform into circulation shares.