Financial leverage and firm value among listed companies in China

Abstract

This research focuses on the analysis of the relationship between financial leverage and firm value among 1546 listed companies from 1990 to 2016 in China. This research uses regression analysis to explore this correlation. Moreover, I get the result – Firm value has a positive correlation with financial leverage in China. Because debt market grows mature gradually, firm value is positively related to financial leverage. Chinese listed companies can consider this research when making financial decisions and managing corporates’ debt.