Capital structure and corporate performance

In recent years, China financial and economic circles have shown great interest in the ways capital structure affects corporate governance and performance. Through an empirical study of Chinese state-controlling and private listed companies, the paper finds: capital structure is an important contributing factor for the fact that private listed companies exceed state-owned ones in terms of performance. The policy implication lies in that: perfecting capital structure helps improve management and governance of Chinese listed companies; the government should further the privatization reforms so as to improve the quality of listed companies.