Research On Capital Structure Of Private Listed Companies Based On Competition

The 2018 “Two Conferences” government work report mentioned: “We must support the development of private enterprises,adhere to the “two unwavering”,insist on equal rights,equal opportunities,equal rules,and fully implement the policies and measures to support the development of non-public economy.Let private enterprises play their part in the wave of market economy.The report highlights the importance of private enterprises in Chinese enterprises.However,private enterprises have always been faced with the problem of financing difficulties,making the company's competitive environment unfair,thus affecting the company's development.In addition,the debt ratio of private enterprises is lower than that of state-owned enterprises.In the face of inter-industry competition,the low financial leverage of private enterprises is passively accepted or actively selected.At the same time,compared with state-owned enterprises,private companies choose whether the low debt ratio is even higher.It may be to gain a competitive advantage.If private enterprises want to occupy a certain market share in the fierce market competition,they must fully consider the market competition environment in which the enterprise is making capital structure decisions.Only by comprehensively integrating various product market competition factors can reasonable financial decisions be made.For enterprises to better enhance their competitiveness and achieve business goals.Therefore,researching the capital structure of China's private enterprises from the perspective of market competition has certain reference significance for the implementation of the financial behavior that meets the needs of private enterprises.This paper analyzes and summarizes previous studies,and based on existing relevant theories and practices,it uses the empirical data of 1149 private listed companies of A-shares from 2013 to 2016 to analyze the strength of competition in various industries.Affecting the changes in the capital structure of private enterprises,empirical studies have found that the intensity of industry competition and the debt ratio of private enterprises are negatively correlated.When the industry competition is expected to occur in the future,the downward adjustment of the capital structure of private enterprises is larger than that of state-owned enterprises,The case of strategic transformation implemented in 2017 analyzed the changes in the capital structure of Evergrande.Its plan is to shift the development model of the company from “three highs and one low”,that is,high debt,high leverage,high turnover,and low cost models to “three lows and one high”.“The model of low debt,low leverage,low cost,and high turnover has changed.The main objective is to reduce the asset-liability ratio by reducing costs and increasing product quality,reducing land reserves,and introducing strategic investors,so that companies can smoothly scale up.The transformation of efficiency type,and occupy a certain market share in the industry competition,through the analysis of Evergrande case Step confirmed these results.The results of the study suggest that prior to the fierce industrial competition,the low financial leverage of private listed companies is not only due to the difficulty of financing,but also a kind of financial behavior chosen by the company to improve its competitive advantage.Finally,on the basis of this,we will make recommendations for private companies to choose the right capital structure.