Effects Of Cross-regional Expansion On Real Estate Companies

While deepening the reform of Chinese housing system and developing the national economy, the real estate industry is growing rapidly and becoming the pillar industry of the national economy. Real estate industry is a regional industry. As China's real estate market becomes mature, and regional barriers are decreasing, many real estate companies are conducting cross-regional development strategy. But the performance of these companies is quite different. So it's necessary to study the issue that how cross-regional expansion affects real estate companies'operating performance.The research is based on the domestic and foreign scholars, combining with the fact of real estate companies in our country. This essay builds a new model to analyze the effects of cross-regional expansion on real estate companies'performance, focusing on three key dimensions of cross-regional expansion. Three key dimensions include the speed of expansion, the scope of expansion and the degree of expansion. Furthermore, this paper employs empirical study by using the panel data of Chinese listed real estate companies from 2006 to 2009. The main conclusions of empirical studies are summarized as follows:Firstly, there is an inverted U shape relationship between the speed of cross-regional expansion and real estate companies'operating performance.Secondly, the relationship between the degree of cross-regional expansion and real estate companies'operating performance is also inverted U shape.Finally, how the scope of cross-regional expansion affect on real estate companies' performance is not particularly clear.There are few researches about the effects of cross-regional expansion on real estate companies'performance. So this essay is an exploration in this area, which could be the references for the companies and government. However, there is still some limitation in this essay, and the following researches could be conducted much fitter.