Research On The Capital Structure And Performance Of Chinese Private Listed Companies

Reasonable capital structure is the key to increase corporate value. Combined with the actual situation of China’s economic the important problem is how to choose a capital structure with a smaller cost of capital can maximize corporate value. Private listed company is the representative of the direction of future development. So it is important to research the relationship between the private listed companies’capital structure and performance for guiding managers to select a reasonable capital structure and to promoting the development of private companies.This paper reviews the basic theory of capital structure and corporate performance at home and abroad firstly, then analyzing the problem of private listed companies by describing the status of private listed companies, finally, revealing the ties of private listed companies between the capital structure and performance by doing the empirical analysis. The paper selected 273 private listed companies an samples, doing the empirical analysis by asset-liability ratio, current liabilities, the largest shareholder as explanatory variable, overall factor scores as explained variable and corporate scale and executive compensation as control variable. We have obtained the following conculsions:first, the asset-liability ratio and performance is negatively correlated, that is, the high of the asset-liability, the lower of the performance; second, the rate of current liabilities has no significant impact on the performance; third, the largest has less impact on the performance; fourth, corpornate scale effects on performance is positively correlated and increasing year by year; fifth, executive compensation and performance is positively correlated.According to the above conclusions, the paper put forward some suggestions on optimizing capital structure to improve permance:maintaining a reasonable capital structure; imporving the evaluation system of private listed company performance; improving the corporate governance structure and incentives; developing the bond market.