The impact of capital structure on corporate performance based on panel threshold model
Jin Wang1, Weidong Zhu2
COMPUTER MODELLING & NEW TECHNOLOGIES 2014 18(5) 162-167
1School of Management, Hefei University of Technology Hefei Anhui, China
2School of Management and School of Economics, Hefei University of Technology, Hefei Anhui, China
This paper takes Value Added as an indicator of corporate performance. In considering the case of differences in growth opportunities, we use Panel Threshold Model to do an empirical analysis in the relationship between environmental management, capital structure and corporate performance of listed companies in China. The results show that: There is a weak positive correlation between environmental management and corporate performance, which means environmental management can improve corporate performance; there is a significant regime effects between capital structure and corporate performance relying on corporate growth opportunities. Capital structure and corporate performance are negatively related for low growth companies and positively related for high growth companies. This is consistent with the classical theory of capital structure, which means Value Added is more suitable as an indicator of corporate performance than profits in China.