Abstract
The financing methods mainly include internal financing and external financing and different financing methods have different effects on performance. As an important part of the capital structure, the debt financing structure will not only affect the profit level of the enterprise, but also affect the external investors of the enterprise through signal transmission and then have an impact on the performance of the enterprise. Based on this background, it is particularly important to study whether debt financing can bring corresponding performance improvement to enterprises. Therefore, this paper selects Chinese A-share listed companies as the research sample and uses the panel data from 2016 to 2020 as the basis to use regression to conduct an empirical test on the impact of Chinese A-share listed companies’ debt financing on corporate performance. The results show that there is a significant negative correlation between debt financing of Chinese A-share listed companies and corporate performance. Based on this empirical result, this article puts forward corresponding improvement suggestions, which will help promote the improvement of corporate performance.
Highlights
With the deepening of the transition economy and the rapid rise of emerging markets, the issue of corporate finance has become a bottleneck for enterprises to leapfrog into development
If book value is taken as the measurement standard of financial performance, it is concluded that debt financing level is negatively correlated with enterprise performance
Song Yanping (2015) made the empirical conclusion that there is a negative correlation between corporate debt financing and corporate performance and the larger the debt scale of enterprises, the greater the financial risk of enterprises, leading to the decrease of the value of listed companies
Summary
With the deepening of the transition economy and the rapid rise of emerging markets, the issue of corporate finance has become a bottleneck for enterprises to leapfrog into development. When a company faces a shortage of free cash flow in the course of its development, the choice of financing becomes a major decision that must be considered when making strategic choices and debt financing can be considered Debt financing has these advantages: faster financing speed; greater financing flexibility; lighter capital cost burden; financial leverage can be used; and the company's control rights can be stabilized. Scholars at home and abroad have done a lot of research on corporate debt financing issues and performance issues, but there have been controversies about the core issue of this field-the relationship between debt financing and corporate performance and a consistent view has not yet been achieved In response to this phenomenon, this article will study the impact of debt financing on the performance of Chinese A-share listed companies from the perspective of financing methods and provide a certain reference for corporate financing
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
