Research On The Relationship Between Financial Flexibility And Enterprise Value From The Perspective Of Diversified Operation

Economic hot spots like supply-side structural reform,real estate destocking,industrial structure optimization and upgrading,structural deleveraging,sino-us trade war are always exposed to us.What we can get from these hot news is that downward pressure on China's economy has increased as the uncertainty about the economic environment sharping.A series of policies aimed at real estate regulation were introduced and implemented by the authority.As is known to all,the promise that apartments in China aren't for investing,they're for living in is not just a slogan.The business environment of real estate industry will be more obscure.Meanwhile,diversification and financial flexibility,as the strategic choice and financial means for enterprises to cope with the uncertain business environment,are increasingly concerned by the theoretical and practical circles.This paper focuses on the relationship between financial flexibility and enterprise value of real estate listed companies in China on the perspective of diversification.This study is divided into six chapters.Research background and significance of this paper,concept definition and theoretical basis,research contents and methods as well as possible innovations and shortcomings are all introduced in the first chapter.The Chapter two is literature review.Of course,we have systematically reviewed the literature on financial flexibility,diversification and the relationship between financial flexibility and diversification.What we have done is helpful to the research work of this paper.One of the purposes of literature review is to measure the index of financial flexibility and diversification.The Chapter three is theoretical basis and research hypothesis.At first,principal-agent theory,information asymmetry theory and contingency theory are introduced to establish the theoretical basis of analyzing financial flexibility.Correspondingly,internal capital market theory and synergy theory are used to construct the theoretical basis of diversification related issues.Besides,current situation of China's real estate industry has been analyzed.Three research hypotheses of this paper have been put forward on the basis of the combination of theory and industry status analysis.Chapter four is research design.In order to verify the research hypothesis,three empirical models are established.On the one hand,china's real estate industry listed companies in 2015-2017 are selected as the data sample of this paper.On the other hand,the preparations,Variables definition and data explanation,for the following empirical analysis have been made.Chapter five is empirical analysis.Descriptive statistics,correlation analysis,multiple regression analysis,robustness test are used to test hypotheses.Chapter six is research conclusions and policy recommendations.The research conclusions are based on empirical results.Related policy suggestions are proposed given the current situation of listed real estate companies in China.Finally,the limitations of this study are explained.And the future research direction is expected.What we can see from the empirical results is that the higher the degree of diversification of Chinese real estate listed companies,the lower the level of their financial flexible reserve.Further,the relationship between financial flexibility and enterprise value is inverted u-shaped.In other words,excessive financial flexibility reserve will lead to the decline of enterprise value.However,the diversification will weaken the relationship between financial flexibility and enterprise value.Several suggestions about the diversification,financial flexibility and enterprise value are put forward at the end of the article.Firstly,enterprises whose main source of income is the real estate industry shall rationally arrange their financial flexible reserves.Secondly,financial flexibility reserve should not be too high,can choose scientific diversification to enhance enterprise value.Finally,diversified enterprises should establish and improve the internal capital market and improve the use efficiency of internal funds.It is hoped to provide new ideas for Chinese enterprises to cope with the uncertain business environment and promote the better and longer development of Chinese enterprises.