Research On The Relationship Between The Capital Structure And Performance——a Case Study Of Listed Energy Service Companies

The research of capital structure has always been a hot academic issue since MM theory was proposed. Domestic and foreign scholars have carried out extensive and in-depth study on capital structure from the theory of capital structure, the influence factors of capital structure and the correlation between capital structure and performance, but the conclusion is not consistent. And in the study of the relationship between capital structure and business performance, scholars pay attention to the economic environment and lack of the research on the specific industry.The development of energy service industry has been more than ten years since the energy performance contracting was introduced to china in1996. However, the market scale of the energy service industry is still very small and is not proportional to the energy saving potential. Besides, the difficulties of financing and the shortage of funds are still the bottleneck restricting the development of energy service industry. Therefore, it is necessary to study the capital structure of energy service companies and investigate the energy service financing strategy.Firstly, the connotation of capital structure theory and the mechanism of capital structure on corporate performance are reviewed. Secondly, we make descriptive statistical analysis on the capital structure characteristics of listed energy service companies. We find that the rate of assets and liabilities of listed energy service companies is low; the debt structure is unreasonable and the rate of current liabilities is high; the project financing is biased in favor of bank loans, and enterprises financing through the issuance of bonds are few. Thirdly, based on the mechanism of capital structure on corporate performance and the status of capital structure of energy service enterprise, we put forward the hypothesis, then establish simultaneous equation model and use three stage least squares method to carry out empirical analysis of samples, so as to verify the research hypothesis, and draw the conclusion. The result could be summarized that the debt ratio of listed energy service companies demonstrate a inverted u-shaped relation with their performance, ownership concentration is positively related to business performance, and the proportion of shares in market circulation and top executives shares have no significant relationship with performance. At the end of the paper, we put forward some measures of optimizing capital structure in view of the existing issues of capital structure of China’s energy service companies.