Comparison Of The Operating Performance In State-owned Enterprises And Private Enterprises Based On Capital Structure Difference

Since the 1950’s, the study of corporate capital structure has been one of the hot issues in the world of financial theory research. State-owned enterprises have always been the major form of Chinese enterprises, making a great contribution to the development of our society. With the further development of the market economy owing to reform and opening up policy, individual, private and other non-public economy has become an important part of the social economy. Private enterprise, representative of the family system, is becoming a new driving force for China’s economic development.State-owned enterprises and private enterprises are playing their roles in all areas separately. Based on the property characteristics of state-owned enterprises and private enterprises, the relationship between capital structure and operating performance is discussed in this paper.Based on the example of listed companies of the four municipalities in China, this paper discussed the relationship between capital structure, ownership structure and operating performance between state-owned enterprises and private enterprises. Firstly,following the basic track of capital structure theory research and learning from the result of previous research, this paper made a comprehensive summary for the connotation of the capital structure, the basic theory and the theory of relationship between capital structure and operating performance. Secondly, the operating performance and capital structure of the four cities were analyzed. Finally, with panel data, regression analysis of capital structure and operating performance was made. We found that, in state-owned enterprises, capital structure is not related to operating performance, whereas in private enterprises, capital structure and operating performance are positively correlated. In state-owned enterprise, while the proportion of ownership concentration is negatively correlated with economic performance, equity balance of ownership is positively correlated with business performance. The proportion of managerial ownership is not related to performance. However, in private enterprise, the ownership concentration is positively correlated with the capital structure. And the equity balance degree and senior equity ownership ratio is uncorrelated with operating performance.This paper proposes three policy recommendations about optimize the capital structure in state-owned enterprise and private enterprise. 1. Promoting the mixedownership reform of state-owned enterprises vigorously and optimizing the capital structure by reforming the property rights; 2. Improving the financing market of private enterprises, providing policy support for the rational allocation of credit funds;3.Reforming the system of appointing and removing executives in the state-owned enterprises and improving the professional manager market and hiring the professional manger from the market.