The Relationship between Firm Performance and Capital Structure: Evidence from Taiwan

The purpose of this study is to investigate the relationship between capital structure and firm’s financial performance by using five years data from 2011 to 2016 of Taiwan exchange-listed companies. Data were analyzed by using descriptive statistics and correlation analysis to find out the association between the variables and t-statistics to test the hypothesis. The findings at the overall market as well as sector levels were unspectacular but remarkably consistent. Capital structure and various financial parameters exhibit correlation coefficients that were mixed in signs with a relatively weak correlation strength. Further, the results suggest that t-test statistics registered statistical insignificance for the three research objectives.