1.2 Literature Review

1.2.1 Previous Studies outside China

Theory of enterprise financing first appears in MM theory put forward by Modiglian and Miler（1958）. Under highly strong assumptions, MM theory holds that the enterprise profit level has nothing to do with the scale and structure of its debt financing. Later, in the practice-examine processes, Modigliani and Miler add the tax assumption（assumed condition of tax）to the MM assumption, and demonstrate that in practice increased debt financing can reduce the tax, and thereby can improve the enterprise profit level. On this basis, Stiglitz（1974）and Smith, Warner（1979）release the bankruptcy assumption of MM theory and bring about the tradeoff theory of debt financing. They believe that the enterprise debt financing can either result in improvement of enterprise profit level or enterprise bankruptcy. Wessels and Timan（1988）releases the financing channel assumption of MM theory, and proves the existence of debt financing pecking order in real economic life. Still later, Jensen and Meckling（1976）releases the manager assumptions in MM theory, considering that by debt financing enterprises can achieve consistency in goals of the managers and the enterprises. Ross（1977）, Leland & Pyle（1977）, Myers & Majluf（1984）, Stulz（1988）and Israel（1991）loosen the information assumption of MM theory, proving the impact of information transfer in debt financing on enterprise performance.Heinkel（1998）, Masulis（1983）, Hpoitevin（1981）and so on demonstrate the impact of debt financing level on enterprise performance through empirical study of the data in the stock market.

1.2.2 Previous Studies in China

Xu Jialin, Hu Huijie（2003）; Yang Xingquan, Chen Xudong（2004）; Wu Hao, Wu Yang, Deng Yikang（2004）; Shao Guoliang, Wang Mansi（2005）;Zhou Zhenhong, Huang Shenze（2006）; Wu Chunlei, Ma Linmei（2007）; Zheng Ruixi, Xu Xinhua, Heqing（2007）; Dai Yu（2011）; Liu Fengliang, Lian HongQuan（2012）; Mu Yutang（2013）; Song Xiaobao（2014）; He Ying, Zhang Dawei（2015）; Wang Xisheng（2015）; Ma Hong, Wang Yuanyue（2015）;Huang Xiaolin, Zhu Song, Chen Guanting（2015）; Zhu Jiajun, Zhou Fangzhao（2017）; Chen Tao, Dang Xinghua, Dou JieJia, Song Wenfei, Han Xianfeng（2017）etc. research on the relationship among the enterprise debt financing, the enterprise equity governance and the enterprise performance and so on.

Tong Pan, Lu Zhengfei（2005）; Zhang Dong（2008）; Guo Jian, Wei Fajie（2008）; Gong Guangming, Liu Yu（2009）; Liu Xing, Peng Cheng（2009）; Wu Haibing（2010）; Zhao Yan, Wang Jun（2011）; Zhang Qisheng（2012）; Ma Na, Zhong Tianli（2013）; Zhao Yan, Chen Jinlong（2014）; Hu Yuancheng, Zhang Zhaoyang（2015）; Peng Cheng, Liu Yi, Changhuan（2017）etc. explain the interrelationship between enterprise debt financing and enterprise investment.

Chen Jian（2003）; Peng Shan（2003）; Liu Li（2006）; Li Yuxiang（2006）; Tong Lizhen（2007）; Yang Hua（2008）; Zhang Ning（2008）; Wong Jing（2009）; He Junqin（2010）; Sun Jihui（2010）; Li Yuling（2010）; Wang Haiqiang（2011）; Chen Yao（2013）Jiang Guoping（2014）; Yu Haizong, Chen Wenwu（2014）; Li Jiuni（2015）; Ye Ming, Li Yuhua, Xu Shuolei（2016）etc. discuss the financial leverage, financial risks and risk control methods in enterprise debt financing.

To sum up, scholars inside and outside China have made many achievements in terms of enterprise debt financing. Some researches have done their researches from the perspective of game; some others are micro data from A share main market or growth enterprise market, which lack support from long-span data on the macro national level; and most of the rest are research paradigms of pure financial analysis.Thus, this study, based on a statistical analysis of 15-year macro economic data in China, aims to improve and supplement the previous researches both inside and outside China.