Empirical Study Of The Relationship Between Capital Structure And Performance Of The Listed Real Estate Companies

Since the establishment of MM theory in 1958, the research of capital structure has became a top academic research direction. Domestic and foreign scholars have made in-depth research on the impact of the capital structure of listed companies, but the results are not always consistent. Studies have shown that the impact of capital structure among different industry sectors and their performance are different, so I believe that there is a need to choose a typical industry to research the relationship between the two. Since 2003, the real estate industry of China is developing rapidly, and it has become the national economy "barometer", playing an increasingly important role in our economy. The real estate industry of our county is not mature enough, when compared to other industries, it has a high rate of assets and liabilities, single source of funding channels, and heavily dependent on bank loans, its special economic status and capital structure make the study of the relationship between its performance and capital structure particularly important.Firstly, this paper introduces the significance of the study, and reviews the theory of the relevant literature. Secondly, I will analyze the present condition of China's real estate industry. Finally, I will use the data of the real estate companies listed before 2003 range from the year of 2003 and 2008, to make empirical research. The research of the capital structure of real estate industry mainly use descriptive statistics method, and it will provide a background for below. Empirical research part, I will choose several indicators and use factor analysis to calculate the performance.Finally I will establish several regression models by using the selected indicators.The result could be summarized as follows:the debt ratio of China's real estate listed companies demonstrate a negative relations with their performance, the proportion of state ownership positively correlate with corporate performance, current liabilities and long-term liabilities demonstrate a inverted U relationship with corporate performance. At the end of this paper, I raise to optimize business capital structure based on the above findings.