Abstract: Taking the data from China’s listed companies as research samples and using investment capacity and market share for describing product market competition of firms, how does capital structure impact on the product market competitiveness of firms is investigated from the perspective of industry competition differences. The result shows that capital structure has a significant different impact on the product market competitiveness with the different industry competition. The investment capacity will decrease with increasing capital structure, but this effect will decrease with decreasing intensity of industry competition. In general, the improvement of capital structure is conducive to increasing market share, and this positive effect will also decrease with decreasing intensity of industry competition. However, when the capital structure of firms is already at a high level, improving the capital structure of firms will easily make the market share fall, which maybe results in a financial crisis, especially when the firm is in a strong competition industry. The study not only enriches the literatures about the research on how does capital structure impact on the product market competition, but also provides some suggestions for business decision-makers in the formulation of target capital structure.