The Study On The Relationship Between The Liabilities And The Corporate Performance Of Chinese Groups

Company's Capital Structure has been the hotspot of international financial research since Modigliani and Miller proposed the MM theorem in 1958. As the important part of financial theory, company's capital structure not only involves enterprise's major financial issues like financial goals, funds-raising modes and costs, cash flow and so forth, but also has a significant impact on corporate governance and incentive structure.In recent years the capital structure and funds-raising modes of our country's Chinese Groups have received more and more attentions of many scholars. With the country's deepening reform of investment and financing system and the improving of capital market mechanism, Chinese Groups can choose more channels for funds-raising. Accordingly, funds-raising pattern will be diversified. However, scholars attach more importance to equity financing but overlooking the benefit of creditors and their role in company's management. What's more, there are few researches on the relationship between funds-raising and corporate performance when debt financing mode is applied in Chinese Groups.This thesis firstly introduces the related theories on capital structure. Then analyzes empirically on the basis of the financial data of some Chinese Groups which listed in 2006-2009 Based on the analyses, the thesis deduces that the asset-liability ratio, the short-term interest-bearing debt ratio and the long-term debt ratio of our country's Chinese Groups are inversely related to Corporate Performance. It indicates that the debt financing of country's Chinese Groups does not contribute to the improvement on corporate performance as much as we expected, and it accords with the current actual state of our country. The fact implies that our country's Chinese Groups are still weak in debt financing management, which is related with the softening situation of chief-creditor's binding, the special structures of Chinese Groups'shareholdings, the unbalanced development of stock market, imperfection of the management mechanism chosen by managers and the insider-control phenomenon.Based on the theoretical analyses and empirical research, the thesis finally puts forward the tentative suggestions on strengthening the management effect on debt financing for related department reference. Firstly the stock market of our country should be vigorously developed, and the legal protection of creditors should be strengthened. In addition, the main bank system of our country should be perfected. Information display mechanism should be facilitated, and the information asymmetry condition should be alleviated. Finally, the positive signal role of Corporate Performance should be well utilized to perfect capital structure and promote the interactive and virtuous circle between debt financing and corporate performance.