Empirical Research On The Relationship Between Capital Structure And Corporation Performance Of Listed Companies In China

Western classical capital structure theories are established on the basis of perfect capital market, but the capital market in china is imperfect,so the related theories are not entirely applicable to our listed companies. The relationship between capital structure and corporation performance is an important content of the capital structure theories. It is the foundation of financing decision to discuss the relationship between them and to seek the optimal capital structure, which has an important significance to our listed companies.The relationship between capital structure and corporation performance is analyzed through empirical study and the applicability of the classical capital structure theories is proved in this paper. Ten years'financial dates of 252 samples companies listed year from the year 1999 to 2008 in A Share Market are selected in the process of empirical study. The main contents include four aspects: First, the basic theories of capital structure and corporation performance are sated. The meanings of the capital structure and corporation performance are defined and the development of capital structure theories and the measuring methods of corporation performance are discussed. Then, the theoretical relationship between capital structure and corporation performance are explained. After that, the capital structure and corporation performance condition of our listed companies are analyzed. Lastly, the relationship between capital structure and corporation performance is analyzed through principal component regression analysis and cure fitting. The optimal capital structure is founded by the cure fitting. After that the capital structure level of our listed companies is compared with the optimal capital structure to present proposals of optimizing the capital structure of our listed companies.The main conclusions are drown through the empirical study: the optimal capital structure of our listed companies exists, long asset-liability is 30.35%.And the proper long asset-liability is between 5.7% and 30.35%.