Research On The Influence Of Introducing Strategic Investors On Corporate Leverage Ratio

Since China proposed that “houses are for living in,not for speculation” in 2016,a series of policies restricting real estate financing have been formulated and implemented.Besides,due to the serious negative effects of high leverage,real estate enterprises are in the dilemma of financing and reducing leverage.Against such a background,real estate enterprises began to look for new financing ways to reduce leverage.As one important way of equity financing,introducing strategic investors can not only raise funds for the sustainable development of enterprises but bring technologies,experience and resources for the enterprises.In this way,it is expected the deleveraging process can be promoted.However,the strategic investors of Evergrande Group did not promote the reduction of corporate leverage ratio.Then,the effect of introducing strategic investors to reduce leverage ratio is unknown.Therefore,this paper conducts a research on the influence of introducing strategic investors on reducing leverage.Taking Evergrande Group and Vanke Group as research objects,this paper studies how introducing strategic investors affects enterprise leverage ratio.First of all,by collecting relevant information of the introduction of strategic investors in the top ten real estate enterprises,the basic profile of the introduction of strategic investors in domestic influential real estate enterprises is summarized.Secondly,the influence of introducing strategic investors on the leverage ratio of two enterprises is analyzed from three aspects: asset-liability ratio,three red lines ratio and financial leverage ratio.Next,the paper studies the mechanism of leverage ratio differentiation from the perspective of corporate governance.Finally,the study analyzes the internal and external factors that cause the inconsistent changes of leverage ratio from the aspects of macro policy environment,corporate strategy and management decision making respectively.The study shows that:(1)The introduction of strategic investors in deed influences corporate leverage ratio.For Evergrande Group,introducing strategic investors reduces corporate leverage ratio to a certain extent,while Vanke Group’s introduction of strategic investors reduces the leverage ratio.Strategic investors in Evergrande Group are more like financial investors in nature,which are not conducive to reducing corporate leverage ratio in a long run.(2)Strategic investors participating in and improving corporate governance are more willing to promote corporate development and reduce the leverage ratio,while strategic investors with a financial nature is not advantageous to corporate governance.(3)Enterprises that are more sensitive to macro policy changes with more conservative strategies and more cautious management decisions are more likely to introduce strategic investors to reduce corporate leverage ratio.The possible contribution and innovation of this paper are as follows: in terms of research perspective,this paper reveals the mechanism of how introducing strategic investors influences corporate leverage ratio,which expands the research perspective of economic consequences of introducing strategic investors.With regard to research content,the current case studies of introducing strategic investors focus on the positive impact,and this study compares the case of Evergrande Group with Vanke Group and analyzes the change of leverage ratio and underlying causes.In this way,the study enriches the literature on the economic consequences of introducing strategic investors and provides suggestions for enterprises to solve problems related to leverage ratio.