This study examines the impact of corporate governance on capital structure decisions based on a large panel of Chinese listed firms. Using the system Generalized Method of Moments (GMM) estimator to control for unobserved heterogeneity, endogeneity, and persistency in capital structure decisions, we document that the ownership structure plays a significant role in determining leverage ratios. More specially, we find that managerial ownership has a positive and significant impact on firms' leverage, consistent with the incentive alignment hypothesis. We also find that managerial ownership only affects the leverage decisions of private firms in the post-2005 split share reform period. State ownership negatively influence leverage decisions implying that SOEs may face fewer restrictions in equity issuance and may receive favourable treatments when applying for seasoned equity nancing, thus use less debt. Furthermore, our results show that while foreign ownership negatively influences leverage decisions, legal person shareholding positively influences firms' leverage decisions only for state controlled firms. We also find that the board structure variables (board size and the proportion of independent directors) do not influence firms' capital structure decisions. Our findings suggest that recent ownership reforms have been successful in terms of providing incentive to managers through managerial shareholdings to take risky financial choices.

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Working capital that represents a significant portion of a firm’s total assets affects its profitability and liquidity. This study examines the performance effects of working capital management using a panel of listed manufacturing companies on the Colombo Stock Exchange (CSE) over the period 2011 to 2016. Controlling for unobservable firm specific heterogeneity and a set of observable firm characteristics, we document that working capital is non-linearly (inverted U-shaped) related to firm profitability. This indicates the existence of an optimal level of working capital that balances the costs and benefits of maintaining working capital, and maximizes firm’s performance.

In this paper, we examine the determinants of leverage in the context of China using a sample of 1844 Chinese non-financial firms over the period 2003 to 2010. This study shows that that the average leverage ratio of Chinese listed firms is similar to those observed in other developing countries. The study also finds thatsize, tangibility,volatilityand firm age are positively and significantly associated with leverage. Furthermore, firm’s profitability has statistically significantnegativeimpact on leverage. Furthermore, we find that we find that firm size, profitability, tangibility, volatility and firm age are the robust determinants of leverage of Chinese listed firms.

This paper examines the relationship between leverage, debt maturity and firm performance, employing a large panel of Chinese non-financial listed firms. The corporate finance literature widely recognizes that the debt and maturity structures are important mechanisms for addressing agency problems in modern corporations. We applied the system GMM estimator to control for endogeneity concerns in the study. We found positive associations between leverage and the proportion of long term debt, and between leverage and firm performance. Our results indicate that leverage and its maturity structure are important determinants of the profitability of Chinese listed firms. Our research has significant policy implications as it suggests that, since China's financial system is dominated by a large banking system, lenders (mainly banks) may extend more long term credit to the more productive private sector, which helps to improve performance of these firms. The findings of this study imply that the Chinese government's efforts to improve the governance of its banking system have been successful in enhancing efficiency and prudence in banks' lending and monitoring behavior. Contribution/ Originality: This study contributes to the finance literature by examining for the first time the performance effects of both leverage and its maturity structure in the context of China. The study shows that leverage and its maturity are important determinants of the performance of Chinese listed firms. The study contributes to the literature on debt financing and bank monitoring in transition economies.