Research On Financing Efficiency Of Construction Enterprises

In this new age of comprehensive entry,people’s demands in economic,political,cultural,social,ecological and other aspects have been growing increasingly.the demands of people for life are not confined to the bottom level of Maslow’s basic physiological and security needs,while moving towards a higher level of belonging,respect and even self-actualization needs,therefore,there is a higher level of people’s pursuit of the living environment,living quality and comfort.The development efficiency and quality of the construction industry is closely related to the country’s livelihood,moreover,as a pillar industry of the national economy,it significantly affects the growth of the national economy.As of 2019,China’s GDP was up to 99086.51 billion yuan,a growth rate of 7.8%while the output value of the construction industry was up to 7090.43 billion yuan,a growth rate of 8.3%.It can be shown that the construction industry has played a significant role in pulling the GDP growth.The construction industry is still a traditional labor-intensive industry which depends on a large number of manual workers to carry out construction work on site.As the threshold of entry for construction work is low and the income is considerable,it attracts a large number of migrant workers and the surplus labor of society,which has been taking on an important responsibility to maintain social stability.The construction business is an extensive industry,while the extensive management mode is prone to cause chaos in construction work,which results in a high risk of uncertainty in construction and leading to the loss of time and resources,as well as the capital cannot be used rationally and effectively.Therefore,how to reduce the risks in construction to improve the efficiency of project management is crucial to the development of the construction industry,as the main body of the construction industry,construction enterprises need to strengthen the supply side structural reform.which starts from improving the quality and efficiency of the supply and deceiving system,can effectively reduce the uncertainty in the construction process,promote the transformation and upgrading of traditional construction enterprises to fine production enterprises,which subsequently enhance the sustainable development of enterprises.In this reform process,a large amount of capital support is required.The construction industry is a capital-intensive business with a low profit margin and poor capital liquidity,which leads to a shortage of own funds to cover the construction needs.Enterprises need to seek external financing to meet the day-today survival and development,scale up and technology upgrading needs in order to achieve sustainable development.Due to the lack of popularization of informatization in the construction financial system in China,there is an information asymmetry between financial institutions and construction enterprises,which has caused high financing costs for construction enterprises in order to avoid risks.Enterprises are significantly influenced by the macroeconomic environment and policies.Under the background of de-stocking,the continuation of a extensive management model can lead to confusion in construction,which results in the waste of time and resources,while internal and external unfavorable factors make it more difficult for enterprises to finance.Capital is the vital source of the development of construction enterprises,while the capacity of enterprise financing and the level of capital allocation is the fundamental guarantee to maintain production operations.With the emergence of large infrastructure PPP projects in the domestic construction industry and the "One Belt.One Road" strategic construction background,enterprises which wish to gain business opportunities to the upper end of the industrial chain development have been seeking more and more capital.How to raise funds effectively and use them rationally has become the key to the development of construction enterprises.Hence,an in-depth study on the financing efficiency of construction enterprises is of great significance to the sustainable development of the construction industry in China.Based on the current state of research by scholars at domestic and international institutions.the study of the financing efficiency of construction enterprises has been mainly conducted at the static and enterprise levels,but insufficient at the dynamic and project levels.Different from the traditional manufacturing industry,the construction process is complex and highly influenced by the external environment,thereby the dynamic analysis of financing efficiency over the years may directly reflect the degree of influence of factors on financing efficiency over the years.In addition,the construction enterprises are engineering based corporations,the capital of the enterprise comes from the project and is dispersed into the project.The analysis of the factors affecting the efficiency of financing,which focuses on the project level,can be more compatible with the characteristics of the construction industry.Moreover,in our country,the efficiency of the financing generated by construction enterprises with different property rights varies due to different internal management mechanisms and applicable external policies.Domestic scholars are also rarely investigating the nature of the enterprise on the basis of factors that affect the efficiency of financing.In this paper,the nature of construction enterprises was divided into two types of state-owned enterprises and private enterprises as virtual variables for the study,where 68 A-share listed companies in the housing construction,infrastructure construction,building decoration,gardening and greening engineering industries were selected as the study sample.The DEAMalmquist model was adopted to evaluate the magnitude of financing efficiency and changes in recent years from both static and dynamic aspects which aimed to conduct descriptive analysis.In view of the particularity of the construction industry,qualitative analysis of the impact mechanism was conducted in terms of both macroeconomic environmental policies and micro-resource allocation where corresponding indicators were selected accordingly.The level of significance of the impact on financing efficiency was quantitatively analyzed through Tobit to which subsequently made appropriate recommendations for the results of the significance.This paper is divided into five parts:Part(?):Introduction.Firstly,the part first introduces the background of the research and discusses the significance of financing efficiency of construction enterprises;Secendly it defines the construction enterprises and financing efficiency;Finally it explains the research methods.possible innovations and deficiencies.Part Ⅱ:Literature review and theoretical basis.Firstly,this part describes the research status of domestic and foreign scholars,and then introduces the financing theory and efficiency theoretical basis,which paves the way for the follow-up research.Part Ⅲ:Analysis of financing efficiency mechanism of construction enterprises.Firstly,this part describes the financing needs and main financing channels of construction enterprises in China,and then makes qualitative analysis on the influencing factors of financing efficiency of construction enterprises in China,which provides theoretical basis for empirical analysis of this paper.Part Ⅳ:The empirical analysis of financing efficiency and influencing factors of construction enterprises.Firstly,this part introduces the DEA model and Malmquist index used in this paper,selects the input-output index of DEA evaluation,then analyzes the relevant data of 68 construction enterprises from 2014 to 2018 through DEA model and Malmquist index,calculates the static and dynamic financing efficiency,and finally empirically analyzes the influencing factors of financing efficiency of construction companies through Tobit model to find out the influencing factors of the low efficiency of financing.Part V:Conclusion and relevant suggestions.First of all,it summarizes the empirical conclusions,summarizing the suggestions of improving the financing efficiency of China’s construction enterprises on the basis of the previous research.To sum up,the scholars’ research on the influencing factors of financing efficiency of construction enterprises is limited to the study of the fund management factors and the connotation of financing efficiency at the enterprise level.Most of them have separated from the macro and micro.Few of them use standard indicators for the measurement research.The innovations of this paper are as follows:(1)This article analyzes the influencing factors on the full chain formed by connecting the macro environment and the micro project level with the corporate entity as the central link.Breaking down the micro aspects into the enterprise level and the project level of fund collection and distribution.The comprehensive and comprehensive study of construction companies on the financing efficiency is more in line with the characteristics of the construction industry.It is possible to obtain more comprehensive,complete and objective research results.This approach is innovative in researching concepts.(2)This paper selects the DEA model to measure the financing efficiency of construction companies,and then introduces the Malmquist index.This method measures the overall level and development trend of the financing efficiency of construction enterprises from a development perspective with a combination of dynamic and static perspectives,and provides a more objective basis for the impact mechanism.In this paper,the property rights of enterprises is setted as a dummy variable to the researching category.It has be proved to be a significant result.This is a certain innovative method in variable selection.