Empirical Research On The Relationship Between Financial Governance Structure And Corporate Performance

The growth enterprise market(GEM) has gradually become an important part of the multi-level capital market structure in our country since October 2009. New listed company increases year by year, and the market has expanded steadily, to broaden the financing channels of the innovative enterprise, to build an important platform for the docking of the technology and financial resources. However, the overall performances is not stable, the performance of the different listed company also present a serious differentiation trend. The financial structure is one of the most significant factors that influent corporate performance. Under this background, the paper combines qualitative and quantitative research methods, standardized and empirical research methods; discusses the relationship between the financial performance of listed companies on GEM and corporate performance. On the one hand, it provide the reference of the research about the relation between financial governance structure and corporate performance, on the other hand, it plays a positive role in exploring a more reasonable financial governance structure,improving corporate performance and promoting a more healthy developing way of GEM board.Firstly, the influence mechanism of financial governance structure on corporate performance is interpreted, referred the points from trade-off theory, principal-agent theory,incomplete contracting theory, and financial-right flow theory. Then, based on the panel data of 972 listed companies on GEM from 2011 to 2013. Dependent variable is corporate performance, independent variables are narrow capital structure, ownership structure, and debt structure, control variables are enterprise scale, numbers of board meetings, and numbers of supervisory board meetings, the corporate performance and the narrow capital structure are respectively measured by return on net assets and asset-liability ratio. The ownership structure is considered from two aspects- ownership concentration and equity restriction ratio, while the former is measured by the largest shareholder’s ownership proportion, the latter is measured by balances of the second largest shareholder; the debt structure is measured by short-term liability ratio, commercial credit ratio rate andbank-loan rate. Using the methods of Hausman test and multiple regression analysis, how financial governance structure impact on corporate performance are empirical tested? The conclusions can be summarized as follows: firstly, the asset-liability ratio levels of listed companies on GEM are relatively low; secondly, the debt structures of listed companies on GEM are unreasonable, which excessively depend on short-term liabilities; thirdly, the higher of asset-liability ratio level of one listed company on GEM, the higher of its corporate performance; fourthly, the corporate performance of one listed company on GEM will firstly decrease then increase, with increase on its ownership concentration;fifthly, the higher of equity restriction ratio level of one listed company on GEM, the higher of its corporate performance; lastly, there are no significances of short-term liability ratios, commercial credit rates, of listed companies on GEM on their corporate performances. The higher of bank-loan rates, the higher of its corporate performance;The policy recommendations can be summarized as follows: to rise financial leverage,to change the financing concept of management, to perfect credit system, to build a multi-level financial system and so on; to optimize ownership structure, to keep the moderate ownership concentration and equity restriction ratio, to optimize debt structure,to improve the long-term liability ratios and reduce the bank-loan rates; to improve the role of financial management of both board of directors and board of supervisors.The innovations can be summarized as follows: on the one hand, using the panel data model, rather than the traditional multiple regression model, can better control the time effect and individual effect on the empirical results, which can get more credible conclusion; on the other hand, redefining the content of financial governance structure,from the perspective of narrow capital structure, ownership structure and debt structure to study the influence on corporate performance, and choosing the whole sample data of the listed companies on GEM for empirical testing.