Research Of Corporate Financing Structure To The Earnings Sustainability From The Perspective Of Life Cycle

As the economic and social environment becomes increasingly complex,the real economy faces many difficulties and challenges,with unstable and unsustainable corporate earnings exacerbating the situation.Maintaining and improving earnings sustainability is an important task for enterprises in an uncertain environment.The sustainable and healthy development of enterprises requires stable sources of funding and diversified financing channels.Finding suitable financing structures is crucial for enterprise development.At different stages of the enterprise life cycle,financing structures exhibit different characteristics and have different effects on earnings sustainability.Revealing the impact of enterprise financing structures on earnings sustainability from a life cycle perspective can help enterprises adjust and optimize their financing structures more accurately and achieve sustainable and robust development.This article uses data from Chinese A-share listed companies from 2011 to 2021 to empirically examine the impact of financing structures on corporate earnings sustainability and further explore the impact of financing structures on earnings sustainability at different stages of the enterprise life cycle.Firstly,the impact of internal financing,debt financing,and equity financing on earnings sustainability is explored.Secondly,the financing structure’s impact on earnings sustainability during the growth,maturity,and decline stages of an enterprise is examined.Finally,the enterprise life cycle is used as a moderating variable to explore the impact of financing structures on earnings sustainability from the perspective of the entire enterprise life cycle.The study found:(1)Chinese listed companies exhibit a state of "equity financing→debt financing→internal financing" in their choice of financing channels.(2)Internal financing is significantly positively correlated with corporate earnings sustainability,and internal financing is beneficial for improving corporate earnings sustainability.Throughout the enterprise life cycle,internal financing and earnings sustainability exhibit a significant positive correlation.As the enterprise life cycle progresses,the positive effect of internal financing on corporate earnings sustainability differs,with internal financing being more beneficial for improving corporate earnings sustainability during the maturity stage.(3)Debt financing is significantly negatively correlated with corporate earnings sustainability,and debt financing reduces corporate earnings sustainability.Throughout the enterprise life cycle,debt financing and earnings sustainability exhibit a significant negative correlation.As the enterprise life cycle progresses,the negative effect of debt financing on corporate earnings sustainability increases continuously.(4)Equity financing is significantly negatively correlated with corporate earnings sustainability,and equity financing reduces corporate earnings sustainability.Throughout the enterprise life cycle,equity financing and earnings sustainability exhibit a negative correlation.As the enterprise life cycle progresses,the negative effect of equity financing on corporate earnings sustainability increases continuously.Based on the above research findings,this article proposes relevant suggestions from four aspects:accurate financing strategy matching the life cycle stage,rational and effective use of internal financing,creating good debt financing opportunities,and creating good equity financing opportunities.