Empirical study on relations between capital structure, governance structure and performance of small and medium-sized enterprises: Based on the data from SME board in China

摘要

This paper constructs a simultaneous equation about capital structure and corporate performance of SMEs using the panel data from 50 listed companies in the SME board from 2005 to 2009 and adopting three stage least squares (3LSL) to estimate the equation. The empirical results indicate that there is an interaction between capital structure and performance of SMEs, and capital structure is a negatively correlated with corporate performance. Moreover, the ratio of the largest shareholder is a downward U-curve relation with corporate performance, and board size is a negative relation with it. The growths of company and company size also have a positive impact on the capital structure and corporate performance of SMEs.