Empirical Research On Financial Monitoring Efficiency Of China's Real Estate Enterprises

Financial monitoring is the financial supervision and financial control as the name implies. So far, not only there is not a complete financial monitoring theoretical system in theoretical circles, but also the important factors of financial monitoring do not play its due role in practice. And there is little empirical research support. However, we generally accepted that the financial monitoring system is a hierarchical structure, including internal and external financial monitoring system. The system is made up of different stakeholders, and each one affects the efficiency of financial monitoring. The efficiency of financial monitoring is the realization degree of the financial objectives for different stakeholders. However, these financial objectives do not reflect the financial interests of individual stakeholders, but rather the integrated financial interests of all related stakeholders. But the contribution to the consolidated financial targets of different stakeholder can not be the same. The different stakeholders play different role in improving the efficiency of the financial monitoring. As our basic and guiding industry, China's real estate is an important indicator of China's economic development. Because of livelihood issues, the monitoring of the real estate industry becomes the focus of our attention. China's real estate enterprises are the cells of our real estate industry.And financial monitoring is the core of the real estate enterprises. How to create a complete financial monitoring system of real estate enterprise? Which factor is more important in this system? Which part plays more significant role in improving the efficiency of financial monitoring? How to improve the efficiency of financial monitoring? These are the problems needed for in-depth explored.This paper is divided into six chapters, each chapter is summarized as follows:Chapter 1, introduction. This chapter proposed the problem to study in this paper, the financial monitoring efficiency of China's real estate enterprises. Then from study of the external financial monitoring and internal financial monitoring at home and abroad, find that the financial monitoring is divided into many levels, but the number of levels and the content of each level is not the same. The majority of study is not comprehensive; just pick one aspect of the financial monitoring. The studies are also mostly based on theoretical research, few of them on empirical studies. So it is difficult to put the financial monitoring theory into practice. Therefore, in this paper, the writer want to establish a complete financial monitoring system; find the important part in the system based on empirical study.Chapter 2, an overview of the financial monitoring theory. Financial monitoring system will be divided into two levels:external monitoring system and internal monitoring systems. The external financial monitoring system, includes market surveillance, government surveillance, intermediate agency monitoring; internal control system is further divided into two levels:enterprise governance monitoring and enterprise management monitoring. Enterprise governance level mainly refers to the investors (shareholders and creditors), the board of directors, and supervisors. Enterprise Management-level mainly refers to the managers at all levels within the enterprise financial monitoring.Chapter 3, empirical analysis of external financial monitoring efficiency. First analyze the correlation of the external financial monitoring system and financial monitoring efficiency theoretically, and make assumptions; then adopt the data of our real estate and macroeconomic factor from 1997 to 2007 as the research sample; select the data to reflect the capital market surveillance and government policy for real estate business as the independent variable, the data of all real estate enterprises income as dependent variable; use least squares (OLS) to make linear regression model. The result is very good, and the model shows that the capital market and government currency policy are the important factors of financial monitoring.Chapter 4, empirical analysis of internal financial monitoring efficiency. First analyze the correlation of the internal financial monitoring system and financial monitoring of the efficiency theoretically, and make assumptions; then adopt the data (panel data) of 45 listed real estate enterprises from the period of 2003 to 2008 as the research sample; select the characteristic of institutional investors, creditors, shareholders, board of directors, supervisors as independent variable, the data of return on equity (ROE), return on assets (ROA), revenue growth, total assets growth rate, the debt security as dependent variable; to reduce the heteroscedasticity of the data, use generalized least squares (GLS) estimates to build model. The result of the main model fits well, and shows that the ratio of institutional investors holding stock, asset-liability ratio, the number of board meetings, and supervisors meetings are significantly correlated with the efficiency of real estate enterprise financial monitoring.Chapter 5, conclusion of the study. According to empirical results from the external financial monitoring model and internal financial monitoring model of China's real estate enterprises, this paper put forward some proposals.The main points of this paper are:(1) capital markets and government policies are the important parts of financial monitoring system. And monetary policy is a powerful tool of government monitoring. (2) The board of directors is the core of internal financial monitoring for the real estate enterprises. (3) Institutional investors, creditors of such active experts can improve the efficiency of financial monitoring. (4) Shareholders should pay more attention to business growth (4) The board of supervisors should be taken seriously. Shortcomings of this study is that financial monitoring theory is not mature, variables in the research process with great subjectivity, some of the important factors are not included in the study Therefore, this subject need to be further explored.