Empirical Study On The Correlation Of Capital Structure And Corporate Performance In Communication And Transportation Industry

The development of communication and transportation industry can lead and serve social development and economy growth, meanwhile the prosperity of the economy will in return provide energetic support to communication and transportation industry. Thus, the economy is closely correlated with communication and transportation industry. Sound transport is precondition to achieve rational allocation of resources, division of labor, specialization and cooperation. States and many international organizations have realized the profound role transportation industry play in the economic development.Listed companies are the pride of all companies; they were the first to accept the baptism of the capital market. Since the 1990s, China's capital market has gone through 21 years, and has made an outstanding contribution to China's economic boom, and its role as the Chinese economy promoter is becoming increasingly important. Up till June 30,2011, China's Shanghai and Shenzhen A-share listed companies which contains a total of 2526, has reached a total market value of 20.11 trillion yuan, an amount equivalent to 50.62% of China's 2010 GDP. According to China Securities Regulatory Commission's classification of listed companies, transportation industries supporting a total of 36 companies, including port 16 listed companies,14 highway listed companies,4 airport listed companies,1 small aircraft equipment company,1 infrastructure development company, which has a total market value of 363.1 billion yuan.Company is an independent economic entity, its goal is to achieve its business objectives to maximize the value of the company. Only the establishment of appropriate financial policies can achieve the maximization of corporate profits, and capital structure directly affects the company's financial policy. There are voluminous relevance researches concerning capital structure and business performance, but there is not a commonly shared opinion on correlation of capital structure and operating performance. In accordance with industry classification code of China Securities Regulatory Commission's classification F11 class, this paper selects 27 listed companies of transportation assistant industry, collects its financial data between 2006-2010, and does descriptive statistical analysis, linear regression analysis and nonlinear regression analysis, in order to test the capital structure and business performance's correlation in the transportation and communication industry and thus find out the optimal capital structure in transportation sector.