Research On Capital Structure And Corporate Performance Of Listed Real Estate Companies

In recent years, the sustainable development of real estate industry made it the most important industry of national economy. From capital structure perspective, real estate industry has higher asset-liability ratio than other industries, depend on the degree of bank loan heavily, etc, especially in recent years, the country’s financial policy has tighten impact on real estate industry financing, then affect the real estate enterprise financing structure. But it also puts forward more strict requirements on the real estate industry development, make its development more normalized, so it is important to do the research of capital structure. At present, our country real estate enterprise has poor ability to resist risk, how to reduce the real estate enterprise financial risk is also an increasingly prominent problem. Currently, many scholars begin to notice how capital structure influence the performance at the real estate industry, but there are still different opinions. The existent empirical analysis also does not have a consistent conclusion on this issue. Therefore, it is necessary to do further research on this aspect.Firstly, this paper points out the problems for study, the research purpose and meaning. Secondly, this paper elaborates the related theory of capital structure, and the related literature at home and abroad were reviewed Thirdly, analyze the financing structure characteristics and performance status. Fourth, do empirical research of capital structure and performance. Fifth, combined with empirical research results, optimize financing structure, and also propound the policy Suggestions to improve the performance of companies. The innovation of this paper lies in:(1) makes a relatively comprehensive study on how financing structure affect the operating performance in real estate industry, first of all, on the whole, discuss how internal financing and external financing influence the operating performance, and then separately discusses the debt structure and ownership structure’s impact on business performance.(2) When study the financing structure’s impact on business performance, joined the virtual financial policy variable, due to the influence on financial regulation and control policy of real estate companies, and previous literature just to explore the financing structure from microscopic appoint. Join the macroeconomic regulation and control factors, will make the research more perfect.(3) Discuss debt structure’s impact on business performance with comprehensive perspective.With a review of the relevant theory and literature, we can draw the following conclusions:(1) From the overall financing structure, most of the studies focus on the debt financing effect on business performance, most western scholars think that debt financing can improve corporate performance, and in our country most scholars think that debt financing is negatively related to the business performance, this is due to the difference between the east and the west capital market development degree.(2) About the debt structure, starting from the maturity structure, most scholars study the issue of current liabilities, long-term liabilities and business performance. According to different market in different samples, the research may produce different results, so scholars haven’t got a consistent conclusion on how the debt maturity structure affecting the business performance.(3) About the equity structure, most scholars’ research divides into two types, ownership concentration and equity properties. Scholars at home and abroad didn’t get a consistent conclusion on the effects of ownership concentration on corporate performance, but most scholars think equity concentration can promote company performance; In our country because of special economic environment and historical problems, there are state-owned shares and legal person share. Most scholars believe that the existence of the state-owned shares will reduce the operating performance.From the present situation analysis, we can draw a conclusion:from the perspective of real estate industry, its financing channel mainly include domestic lending, self-raised funds, use of foreign capital and other sources. Other sources accounted for the highest, mainly including advance payments, and mortgage loans. In recent years, the advance payments accounted for nearly60%of the other sources; bank loans accounted for more than90%of domestic loans. In the three financing ways of listed companies, debt financing accounted for the highest, followed by the equity financing, and the last is the endogenous financing. according to a study in the debt maturity structure, real estate listed companies’ current liabilities ratio is more than70%, and shows a trend of declining; Long-term debt ratio is on the rise. Bank loan ratio is high, and declining, and bonds payable ratio is less than1%before2008.About the ownership structure, the first shareholder’s stake is about40%, and this proportion is high. The tendency of the return on assets is not fixed and from2002to2011, the real estate listed companies’ profits and assets have been growing, but growth rate is not stable.This article selects listed real estate companies as samples and use multiple regression analysis method We can get the following results:Internal financing is less, but can improve corporate performance; debt financing and equity financing has negative impact on business performance, and it is necessary to build a diversified financing structure. Current liabilities has no significant impact on business performance, and company should actively adjust the debt maturity structure; Bank loan’s influence on business performance is negative, because Banks haven’t play the role of the supervision very well, and this requires relevant policy encouragement and support. Ownership concentration has positive effect on corporate performance. The company size is positively related to performance, and macro financial policy impact on business performance negatively.This article makes a relatively comprehensive study about the financing structure’s impact on performance. But this article has some disadvantages:first, this article selects a representative single index, may be the measure of the performance is not enough objective. Adopt a more accurate mathematical and statistical tools to more rigorous research problem is my future direction. Secondly, this paper only studies the financing structure index linear relationship with the business performance, and didn’t study the nonlinear relationship between them.