Research On The Non-linear Relationship Between Capital Structure And Enterprise Performance Of Real Estate Enterprises

This paper summarizes relevant literatures on the relationship between capital structure and enterprise performance.Scholars' conclusions on the relationship between them can be divided into three categories,including positive correlation,negative correlation and insignificant correlation.In addition,this paper summarizes and sorts out the capital structure theory according to the order that the theory puts forward,and further expounds the influence mechanism of capital structure on enterprise performance.According to the development status of the real estate industry in China,this paper points out the characteristics of the current development of the real estate industry.In addition,this paper divides China's listed real estate companies into three categories according to the Wind classification standard,namely residential real estate(RRE),industrial real estate(IRE)and commercial real estate(CRE),and analyzes the different characteristics of the three listed real estate companies in terms of corporate performance,capital structure and industry development situation.Furthermore,this paper makes an empirical analysis of the capital structure and corporate performance of these three kinds of listed real estate companies,respectively.In the empirical analysis,the reasons for putting forward the assumption of nonlinear relationship in this paper are explained at first.The hypothesis of this paper is that the effect of capital structure on corporate performance is not linear,but a threshold effect.Moreover,within a certain range,corporate performance will rise with the increase of asset-liability ratio,and after this range,corporate performance will begin to decline with the increase of asset-liability ratio.That is,the company has an optimal capital structure.After the empirical tests of three types of companies,this paper finds that there is a single threshold effect between the capital structure and corporate performance in CRE,but there is no double threshold effect between them.And there is no significant threshold effect between them in RRE and IRE.In addition,when the capital structure is less than the threshold value,the estimated coefficient of capital structure is positive.However,when the capital structure exceeds the threshold value,the estimated coefficient becomes negative.The change of the estimated coefficient from positive to negative means the threshold value of CRE is its optimal capital structure.The company can adjust the proportion of debt or equity reasonably to reach the level of optimal capital structure.Unlike CRE,RRE and IRE have no threshold effect due to policy uncertainty and industry operation mode.Based on the research results of three kinds of listed real estate companies,this paper provides suggestions on improving enterprise performance and optimizing capital structure.The innovation of this paper is to use the panel threshold regression model(PTRM)to study the non-linear relationship between the capital structure and corporate performance of three kinds of listed real estate companies in China,which provides theoretical support for the optimization of capital structure and improvement of enterprise performance.