Empirical Study Of The Relationship Between Capital Structure And Financial Performance Of China's Real Estate Listed Companies

With the comprehensive development of China's economy,the real estate industry is paid great attention by our country as a mainstay industry of our national economy. The real estate industry has been an important part of market economy. The real estate industry is a capital-intensive industry, so its development at this stage still can't live without the support of financial institutions. Therefore,the banks and other financial sector need to know about the financial situation of the real estate business in order to control credit risk. Real estate companies need to know about the capital structure's current situation and the factors which influenced it to arrange financing reasonably and optimize the capital structure. The real estate listed companies have certain representativeness,so we can know about the capital structure of the real estate companies by researching on the real estate listed companies.From the establishment of MM theory by Modigliani and Miller,more and more scholars found that the assumptions of MM theory didn't perform perfectly in the real world.From the late 1970s,the new capital structure theory boarded the academic arena The Asymmetric Information theory is the main theory of the new capital structure theory which injected fresh blood to the development of the capital structure theory.In our country,Corporate Governance theory attracted the scholars'attention as well as the capital structure theory. The real estate industry developed rapidly in the last ten years,so how to develop the industry reasonably and rapidly became the research focus. In recent years,our country has introduced a series of policies to regulate the development of the real estate industry. Chinese financial supervision department also formulated a series of regulatory policies on real estate loans to strengthen the supervision of the real estate. These policies have an impact on the management and financing channels of the real estate industry, thereby it affected their capital structure.The capital structure affected the capital cost,and then it can affect the financial performance. These days more and more scholars begin to study on the impact of the capital structure on the financial performance, but the different opinions still exist in these questions such as how the capital structure impact on the corporate performance.And the recent empirical analysis has not yet come to unanimous conclusions on this issue. Therefore,the purpose of this paper is to construct models of the relationship between the capital structure and financial performance of real estate listed companies, and then explore the relevance between them through the specific data, and at last try to optimize the corporate capital structure.