China Real Estate Firms' Capital Structure Influencing Factors

Ever since the appearance of MM theory, the issue of capital structure has been a spotlight among financial professionals. How to make a capital structure decision has been called 'the capital structure enigma'. Since it has been only a few years since China's capital market came into been, the development of capital market was unbalanced, the corporate governance of listed companies was flawed, and there are still many faultinesses in the law system, it is even more difficult to study the capital structure of China's listed companies. Real estate industry is closely related to the macro economy. And there are many financial instruments involved in the whole process of real estate developing, thus studying the determinants of capital structure of China's listed real estate companies can be very helpful, both in terms of academic research and financial practice.This paper firstly stated the overall framework and points of innovation of the research, then reviewed the evolution of capital structure theories. The third chapter gives the readers a whole picture of China's real estate financial system, and implicated the financing preferences of local real estate players. In the end, the paper established a panel data model, conducted a series of regression analysis, and discussed in depth the outcomes of the analysis.