Empirical Research On The Relationship Between Enterprises Capital Structure Change And Development Capacity

Abstract:Reasonable capital structure contributes to maximize the value of listed companies, to ensure financial security and to achieve goals related to long-term development. Scientific capital structure decisions can not only avoid liability risks, but also increase earnings per share with financial leverage, achieve the goal of maximizing corporate value, and ultimately promote business development and growth.The power industry is the most important basic energy industry of national economy and is the development priorities of world economic development strategy. For a long time, the development modle of China’s power industry has such fundamental problem, which is "high consumption, high pollution, difficult cycle, low efficiency". Sustainable development of power industry is still in its infancy, the extensive mode of development has not been fundamentally changed, the capability of sustainable development needs to be further strengthened. On the one hand, year after year, high-speed expansion brings about financial constraints, financial constraints leads to financing needs, which results in high ratio of debt. On the other hand, industry profit margins have been fluctuating at a low level, endogenous development capacity is limited.It is badly in need of theoretical and empirical analysis about the influence of capital structure on power industry’s development capacity.This paper focuses on the following research. First, the concept of capital structure and development capability is made clear and definite; capital structure theory and development capability theory is explained,which provides theoretical basis for the introduction of this research. Secondly, this paper analyses and compares the financing status of China’s power listed companies, specifically analyses the companies’financial structure and its influencing factors, discusses its financing costs and financial leverage effect, and then gives a general analysis of the influence of capital structure on development capability of China’s power listed companies. Thirdly, this paper takes Shanghai and Shenzhen A-share power listed companies as the sample, analyses and evaluates the trends of capital structure and development ability, and then builds a multiple linear regression model to make empirical analysis of the relationship between capital structure and development capability of electric listed companies. Finally, on the basis of previous study, this article gives some correlative countermeasures and suggestions about how to optimize capital structure so as to enhance development capacity for the electric listed companies.The innovation points of this paper are:(1)Analysing the impact of the electric listed companies’capital structure on their development capacity from the overall level of capital structure, debt maturity structure and ownership structure aspects makes the research more detailed, more comprehensive and more systematic.(2)Making a more comprehensive measure of the companies’ development capacity by forming integrated development capacity indicators from the original development capacity indicators with factor analysis, thus makes the research results more representative.(3)Grouping the sample according to different standards of inspection makes the empirical results more meaningful, and provides useful experience for management practices of China’s power listed companies.