The Impact of Different Financing Methods on Enterprise Performance: Evidence from Chinese High-tech Companies

Abstract

In the era of the new knowledge economy, high-tech industries are increasingly becoming an effective way and important means to promote a country's economic growth and sustainable social development. However, due to the high investment and high-risk operating characteristics of high-tech companies, they will face significant difficulties in the financing process, which can easily lead to the rupture of the capital chain and affect the normal operation of the enterprise. Financing structure has always been a key aspect of modern enterprise management. A reasonable financing structure can reduce financing costs, improve corporate governance structure, and promote the improvement of corporate performance. This article collects data from 2773 Chinese high-tech listed companies from 2017 to 2021 to study the impact of different financing methods on enterprise performance. The research results indicate that endogenous financing can promote the improvement of enterprise performance, while debt financing and equity financing have a negative impact on enterprise performance. Therefore, high-tech companies should improve their endogenous financing ability by improving their profit retention rate through scientific management. At the same time, the government should strengthen macroeconomic regulation, allocate market funds reasonably, and strengthen supervision of high-tech companies.