A Study On The Relation Between Debt Financing And Corporation Performance Of Listed Companies

It is believed by financing structure theory that debt financing can improve company performance. At present, listed companies of our country to high debt and low performance, high performance and low liabilities coexist and lead to debt financing governance effect deterioration, Experts rarely analyze the management of debt financing function and mechanism research in theory and empirical.This article is based on the results of research at home and abroad. Firstly, analyze mechanism of between the debt financing and the company performance theoretically. We collect debt financing and company performance indicators of the all the listed companies of China’s stock market is in2008-2010, then select the samples according to a certain standard. Then, analyze the performance index by factor analysis. As we all know, single company performance indicators can’t represent performance of the company well.The results of the study show that the relationship between debt financing and corporate performance is significant in the Chinese listed company. Firstly, debt financing level and company performance have negative correlation. Secondly, debt maturity structure and corporate performance have positive correlation. Finally, debt source structure and corporate performance contain negative correlation. Analysis results is a little different with the theoretical, the main reason is the market economy in our country is not perfect. At the same time, the listed company debt structure is not rational. Such as, the asset-liability ratio is low, long-term liabilities is too low, and most company rely too much on short-term debt.Finally, based on research conclusion and actual situation in China, we try to find a way to use debt financing governance role in improving corporate governance well. In the method we can use the performance company as a signal to help perfect the capital structure. In the article, we put forward the some countermeasures for related department reference.This paper elaborates five parts as following:The first part is the introduction part. In this part, mainly introduce the research purpose and significance. By reviewing introduced relevant research theory and results from domestic and foreign and make corresponding literature review, we put forward significance and improvements. Based on this, we put forward the innovation points of this paper.The second part is the definition of theoretical basis. In this part, we definite the main concept involved in this article, and expatiate the mechanism of debt financing with company performance.Designing the research is in the third part. This part including the choice and eliminate of the sample company, the selection of dependent variable index and independent variable index, and the descriptive statistics of variables. Because of the using of comprehensive performance evaluation index company performance in this paper, in this part we analyze the selected dependent variable index factor to extract common factors. Finally, we get a comprehensive performance indicator.The fourth part is the empirical analysis of test. In this part, we put forward the assumption according to the relevant theoretical basis. Then design the linear regression equation, regress the equation, and analyze the result of regression.The fifth part is the conclusion and analysis part. Analyze the results mainly based on the empirical analysis results. Then offer proposals about debt financing to listed companies in China’s, and put forward the study limitations of this paper.This innovation of this paper is the selection of industry virtual variables and annual virtual variables. So we can put the profession characteristic and the macroeconomic environment influence into the analysis, seek the dynamic and the connection of research.