An Empirical Study On Influential Factors Of Equity Financing Cost In Development And Managing Of Real Estate Industry

With the development and regulation of China's stock market, the factors which influence the listed companies'equity behaviors and equity financing cost have become more and more complicated. To get a thorough understanding of these factors and the characters of our market will have a far-reaching significance in establishing a healthy running mechanism, improving the quality of listed companies, and providing investors with reliable information and scientific guidance.The paper theoretically analyzes the factors influencing equity financing cost from different aspects. Based on that, we have an empirical research on the possible factors, which may influence equity financing cost of the listed companies. From a micro aspect, we choose 12 factors, which contain not only those widely focused from domestic and abroad, but those rarely considered in present empirical research. These 12 factors includeβthat can reflect the market, and financial indicators that reflect the managing status of the listed companies, such as balance-managing ability, liquidating ability and so on. Our research uses multifactor model combined with cross-section regression and econometrics and analyzes listed companies of development and managing of real estate industry in Shanghai and Shenzhen Securities Markets from January 1, 2003 to December 31, 2004.After careful empirical research, we find thatβis the most dominating factor influencing the equity financing cost. We also find thatβand equity financing cost are negative linearity correlativity which is obviously consistent with traditional theoretical hypotheses.