Following the traditional neo-classical, corporate finance theory take firms\' production activities as a "black box". The production technology taken by firms and their competence in product market generate cash flow. This cash flow only provides an external constraint on the financing and investment activities of enterprises, and it has no effect on the production activities on product market. The strategic corporate finance theory, which began in the 1980s, connected corporate finance theory and the theory of industrial organization. Capital structure decision affects the state of competition in product markets, at the same time, market competition counterproductive in the capital structure decision.There have been a lot of studies about the impact of capital structure on the state of competition in the product market, but they fail to reach a unanimous conclusion. Based on the review of the strategic corporate finance theory, this paper expands the study on strategic effect of capital structure in three aspects. First of all, considering the impact of product market competition on the product market, this paper does an empirical study on the the strategic effect of capital structure by using structural equation model, and deepening the empirical study in the two following aspects. Considering the interaction of capital structure and product market competition, when market concentration reaches a certain degree (CR3=0.22), capital structure will enhance market competence, and with the increase of market concentration, strategic effect increases; when market concentration is low, market competence will decrease with capital structure. From the perspective of the debt maturity structure, the strategic effect of capital structure is negative correlated with the debt maturity structure. In order to test whether the conclusions of this paper is related with the financing environment and the product market competition, this paper analyzes the institution background faced by the Chinese listed companies. On this basis, this paper gives the policy recommendations.