Research on the Relationship between Capital Structure and Financial Performance of Air Transport Companies Listed on the Shanghai and Shenzhen Stock Exchange of China


Volume 7, Issue 3
Wang Qiao, Li Li

Published online: 26 June 2021
Article Views: 20
 
AbstractReferencesCite
This paper studies the relationship between the capital structure and the financial performance of listed companies in the air transportation industry. In the research process, the literature research method is mainly used to analyze and comb the research status at home and abroad; the statistical analysis method is used to study the status quo of the capital structure and financial performance of China’s shipping and transportation listed companies. Clarify the characteristics of capital structure and financial performance through status quo research, and analyze the reasons; use regression analysis, factor analysis, and other research methods to establish models and empirically analyze the relationship between capital structure and financial performance of listed companies in China’s air transportation industry. The study found that the comprehensive financial performance of air transportation companies listed on the Shanghai and Shenzhen stock exchanges in China are negatively correlated with Short-term debt ratio, Long-term debt ratio, Commercial credit ratio, and Equity balance; and the Shareholding ratio of the largest shareholder CR1, the Shareholding ratio of the top ten shareholders CR10, and Company size are positively correlated. Through the analysis of the relationship between capital structure and financial performance, it can provide a basis for adjusting the capital structure of air transport companies. Optimize the financing order of the air transportation industry and reduce the debt ratio.

  1. Berger, S. L. (2002). Histone modifications in transcriptional regulation. Current Opinion in Genetics & Development, 12(2), 142–148. doi:https://doi.org/10.1016/S0959-437X(02)00279-4
  2. Berle, A. A., & Means, G. C. (1932). The modern corporation and private property. New Brunswick, Canada: MacMillan.
  3. Booth, L., Aivazian, V., Demirguc-Kunt, A., & Maksimovic, V. (2001). Capital structures in developing countries. The Journal of Finance, 56(1), 87–130. doi:https://doi.org/10.1111/0022-1082.00320
  4. Burki, A. K. (2017). Financial crisis and determinants of capital structure of investment banking sector in Pakistan. Journal of Administrative and Business Studies, 3(3), 153-160. doi:https://doi.org/10.20474/jabs-3.3.5
  5. Chang, C. (1999). Capital structure as optimal contracts. The North American Journal of Economics and Finance, 10(2), 363–385. doi:https://doi.org/10.1016/S1062-9408(99)00028-5
  6. Chen, H., Hexter, J. L., & Hu, M. Y. (1993). Management ownership and corporate value. Managerial and Decision Economics, 14(4), 335–346. doi:https://doi.org/10.1002/mde.4090140406
  7. Chuanxian, L. (2011). Capital structure and equity refinancing performance of private listed companies. Economic issues, 2011(9).
  8. Collins, J. M., & Sekely, W. S. (1983). The relationship of headquarters country and industry classification to financial structure. Financial Management, 12(3), 45–51.
  9. Daowei, M. (2009). Asset reorganization and performance analysis of listed companies in China. Economic System Reform, 6.
  10. Demsetz, H., & Lehn, K. (1985). The structure of corporate ownership: Causes and consequences. Journal of Political Economy, 93(6), 1155–1177. doi:https://doi.org/10.1086/261354
  11. Durand, D. (1952). Costs of debt and equity funds for business: Trends and problems of measurement. In Conference on Research in Business Finance, New York, NY (pp. 215–262).
  12. Faccio, M., & Lang, L. H. (2002). The ultimate ownership of Western European corporations. Journal of Financial Economics, 65(3), 365–395. doi:https://doi.org/10.2139/ssrn.286053
  13. Feng, G. F., Han, B., & Yan, B. (2002). Empirical analysis of changes in the concentration of equity ownership in Chinese listed companies. Economic Research, 8, 12-18.
  14. Frank, M. Z., & Goyal, V. K. (2003). Testing the pecking order theory of capital structure. Journal of Financial Economics, 67(2), 217–248. doi:https://doi.org/10.1016/S0304-405X(02)00252-0
  15. Genfu, F., Lin-jiang, W., & Shi-yan, L. (2000). An analysis of the influential factors affecting the formation of capital structure in Chinese listed companies. Journal of Finance and Economics, 3(4), 72-76. doi:https://doi.org/10.12691/jfe-3-4-3
  16. Genxiang, S., & Pingfang, Z. (1999). Empirical analysis of determinants of capital structure of listed companies. Quantitative Economics and Technology Research, 5, 55-57.
  17. Guoliang, L., & Jiasheng, W. (2010). An empirical study on the equity structure, incentive system and performance of listed companies. Economics and Management, 5, 40-45.
  18. Hall, B. J., & Liebman, J. B. (1998). Are CEOs really paid like bureaucrats? The Quarterly Journal of Economics, 113(3), 653–691. doi:https://doi.org/10.1162/003355398555702
  19. Harvey Pamburai, H., Chamisa, E., Abdulla, C., & Smith, C. (2015). An analysis of corporate governance and company performance: A South African perspective. South African Journal of Accounting Research, 29(2), 115–131. doi:https://doi.org/10.1080/10291954.2015.1006482
  20. Holderness, C. G., & Sheehan, D. P. (1988). The role of majority shareholders in publicly held corporations: An exploratory analysis. Journal of Financial Economics, 20, 317–346. doi:https://doi.org/10.1016/0304-405x(88)90049-9
  21. Jianshang, D. (2009). An empirical study on the operating performance of listed companies in China’s communication and cultural industry. Modern Business Industry, 13, 86-87.
  22. La Porta, R., Lopez-de Silanes, F., Shleifer, A., & Vishny, R. (1999). The quality of government. The Journal of Law, Economics, and Organization, 15(1), 222–279.
  23. Limpaphayom, P., & Ngamwutikul, A. (2004). Ownership structure and post-issue operating performance of firms conducting seasoned equity offerings in Thailand. Journal of Economics and Finance, 28(3), 307–332. doi:https://doi.org/10.1007/bf02751735
  24. Ling, L., & Geng-Yan, Y. (2010). Empirical analysis on capital structure and profitability of the listed SMEs—comparative study based on before-and-after listing data of SME on the SME Board. Industrial Economic Review, 1.
  25. Ling, W. (2010). Study on the relationship between equity structure and company performance of listed companies on the SME board. Dalian, China: Northeast University of Finance and Economics.
  26. Liu, Z., Jiang, F., & Lu, E. (2003). Capital structure and product market competition intensity. Economic Research, 49(7), 60–67.
  27. Masulis, R. W. (1980). The effects of capital structure change on security prices: A study of exchange offers. Journal of Financial Economics, 8(2), 139–178. doi:https://doi.org/10.1016/0304-405X(80)90015-X
  28. Mateev, M., Poutziouris, P., & Ivanov, K. (2013). On the determinants of SME capital structure in central and Eastern Europe: A dynamic panel analysis. Research in International Business and Finance, 27(1), 28–51. doi:https://doi.org/10.1016/j.ribaf.2012.05.002
  29. Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261–297.
  30. Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221. doi:https://doi.org/10.1016/0304-405X(84)90023-0
  31. Neminno, R. C., & Gempes, G. P. (2018). The moderating effect of intellectual capital on the relationship between corporate reputation and knowledge sharing of commercial banks. Journal of Administrative and Business Studies, 4(3), 145-155. doi:https://doi.org/10.20474/jabs-4.3.3
  32. Rajan, R. G., & Zingales, L. (1995). What do we know about capital structure? some evidence from international data. The Journal of Finance, 50(5), 1421–1460. doi:https://doi.org/10.1111/j.1540-6261.1995.tb05184.x
  33. Ronald, W. M. (1983). The impact of capital structure change on firm value. The Journal of Finance, 38(1), 107–126. doi:https://doi.org/10.1111/j.1540-6261.1983.tb03629.x
  34. Ross, S. A. (1977). The determination of financial structure: The incentive-signalling approach. The Bell Journal of Economics, 8(1), 23–40.
  35. Scott Jr, D. F. (1972). Evidence on the importance of financial structure. Financial Management, 1(2), 45–50. doi:https://doi.org/10.2307/3665143
  36. Songzhi, S. (2015). Research on the impact of debt financing on the operating performance of the company. Journal of Jinzhong University, 32(2), 44-48.
  37. Titman, S., & Wessel, R. (1988). The determinations of capital structure choice. Journal of Finance, 43(1), 1-19.
  38. Xinli, W., & Hongyao, Z. (2014). The impact of debt financing structure on corporate performance – based on agricultural listed companies. Journal of Heilongjiang August First Land Reclamation University, 4.
  39. Xixi, H., & Yifeng, S. (2002). An empirical analysis of the factors affecting the capital structure of listed companies in China. International Finance Research, 2002(8), 45-52.
  40. Ying, L., & Shiyin, Z. (2006). An empirical study on the capital structure and performance of listed companies in China’s power industry. Statistical Education, 12, 20-23.
  41. Yongxiang, S., & Zuhui, H. (1999). Stock structure and performance of listed companies. Economic Research, 12, 23-30.
  42. Zhen, W. (2012). Empirical research on the impact of credit structure of listed companies in China on corporate governance performance. Financial Commerce.
  43. Zhengfei, L., & Yu., X. (1998). Empirical research on the main influencing factors of the capital structure of listed companies. Accounting Research, 8, 34-37.
  44. Zhiguo, L. (2008). A study on the relationship between corporate profitability and capital structure – an empirical analysis based on listed companies in Shandong. Industrial Technology & Economy, 5, 139-142.
  45. Zuoping, X. (2005). The impact of corporate governance structure on the choice of capital structure: Evidence from chinese listed companies. Economic Review, 1, 67-77.
Qiao, W., & Li, L. (2021). Research on the relationship between capital structure and financial performance of air transport companies listed on the Shanghai and Shenzhen Stock Exchange of China. International Journal of Business and Administrative Studies, 7(3), 27-41. doi: https://dx.doi.org/10.20469/ijbas.7.10003-3