The Research On The Factors Of The Capital Structure Of Real Estate Industy In China

The research on capital structure in the west has become one of the most critical issues of corporate finance since the MM theorem had been known in 1958. Capital structure is not only related to investing and financing decisions, but also plays great roles in corporate performance, corporate value, corporate government and corporate strategy.Since 1970s, many famous academics did a lot of empirical researches about the factors which affect capital structure releasing the strict hypothesis of the MM theorem. It was proved that the capital structure had a direct bearing on the classification of the industries. It has been only a few years since China's capital market came into been, the development of capital market was unbalanced, the corporate governance of listed companies was flawed, and there are still many faultinesses in the law system, it is even more difficult to study the capital structure of China, listed companies. Real estate industry is closely related to the macro economy. And there are many financial instruments involved in the whole process of real estate developing, thus studying the determinants of capital structure of China, listed real estate companies can be very helpful, both in terms of academic research and financial practice.This paper summarizes the status of the west research by introducing the main theories of capital structure. On this basis, the paper uses the method of statistical analysis via combining the characteristics of the real estate industry. Then the paper gives the readers a whole picture of China's real estate financial system and the characteristics of the industry, aspects from the asset-liability ratio, long-term debt ratio and current debt ratio. Next, the dependent variable is set to asset-liability ratio, the independent variables are set to profitability, solvency, liquidity, growth, firm size, asset-backed, non-debt tax shield, operational risks and ownership concentration. Empirical analysis shows that there is no significant relationship between the asset-liability ratio and the profitability, growth and ownership concentration of the real estate industry. And the other factors are significant. And explain the inconsistencies of the oretical hypotheses and empirical results. Finally, on the basis of the results of empirical analysis and normative analysis, the paper gives some reasonable suggestions of the capital structure of the real estate industry from the perspective of macro and micro optimizing.