Financial Leverage and Operational Efficiency: An Empirical Study on the Survival Performance of Mongolian Small and Medium-Sized Mining Enterprises

Abstract

The formation and evolution of financial leverage in Mongolian small and medium-sized mining enterprises are influenced by both resource endowment constraints and the financing environment, demonstrating significant industry-specific heterogeneity. The study proceeds from three dimensions, namely capital structure characteristics, transmission mechanisms, and the association with survival performance, thereby revealing the internal logic through which financial leverage affects operational efficiency. The analysis shows that mineral resource endowments shape the debt financing structure, the extraction cycle leads to asymmetric changes in capital costs, and fluctuations in leverage affect financial flexibility via free cash flow transmission. Interest expenses continuously erode marginal profits, the asset turnover ratio undergoes dynamic adjustments, and fixed costs together with financial leverage produce a synergistic amplification effect. Debt repayment capacity imposes a sensitive constraint on the survival period, a substitution relationship exists between financing flexibility and operational agility, and the leverage buffer capacity has a limited boundary under external price shocks. The study finds that financial leverage has a threshold range; beyond the critical point, it transforms from an efficiency-adjustment tool into a risk-accelerating carrier. Essentially, leverage choice represents a dynamic trade-off between resource allocation flexibility and financial safety boundaries.