Study On The Relationship Between The Capital Structure And Corporate Performance

The Capital Structure mainly represents the relative relationship among the resources of different capital. It has been being a long debating topic, the academic field whether the proportional relationship itself has an impact the value of a firm, or whether exists an optimal Capital Structure. However, Myers(2001) says we still know little about Capital Structure.The theories on the Capital Structure become relatively perfect after being researched continuously, but it has not come to the same conclusion in both theory and practice.Previous research results mainly from the perspective of Debt ratio. Based on the absorption from the research results of the predecessors, we make research on the relationship between Current-debt ratio, Long term-debt ratio and Corporate Performance.In our paper, there are three parts: First, the development of Capital Structure included in chapter two; Secondly, previous research results on the relationship between Capital Structure and Corporate performance is in the chapter three, on the basis of theory analysis and a series empirical analysis, we make an assumption; and in the chapter four, it is our research results.On the basis of theory analysis, a series of empirical analysis have been conducted in terms of listed company of china. We found relationship between Capital Structure and Corporate Performance is inverted "U" type relationship, and the optimal Capital Structure is significantly lower than the level of developed countries. Moreover, the results are also tested by the transport sector.Although our paper on the measurement of capital structure and the choice of the model is not perfect, after all, it is a useful experiment.