An Empirical Research On Debt Financing And The Corporate Performance Of Real Estate Listed Company

The debt financing is an important financial decision of an company. The governance effect of debt financing has been the focus of academic research. The research of debt financing is early in the foreign country. With mature capital markets and sound corporate governance structure, debt financing on corporate performance, both in theoretical studies or empirical studies have been mature. Domestic research in this area relatively late, and there are differences of the conclusion. Based on this background, this study research governance effect of debt financing, to improve our governance structure, improve the performance of the company of great significance.Healthy and stable development of the real estate industry has a pivotal role in the national economy. The real estate industry is a highly capital-intensive industry that requires huge capital investments, which requires a smooth financing channel to meet their funding needs. The research on the real estate industry found that its funds mainly rely on debt financing and its asset-liability ratio remains high. Whether the high debt operations of the real estate industry can be conducive to the increase in corporate performance? Faced with such question, this article discusses how the listed real estate company debt financing affects corporate performance from the overall level, the maturity structure and source structure of debt financing.This article is divided into five parts, which included introduction, theoretical analysis, empirical analysis and policy recommendations.Part one:Introduction. Discusses the research background and significance; expresses and reviews research status at home and abroad, which leads to the direction of this study; explains the main contents of this article, as well as the approach to the study and the contribution point of this paper in the final.Part two:theory analysis on the effect of debt financing on corporate performance. First described the theoretical basis of the debt financing on corporate performance, as the basis for this study; followed by the theoretical analysis of the debt financing on corporate performance, this part is mainly analyzed from the positive and negative impacts and raised research hypothesis on the basis of the theoretical analysis; Finally, discusses the characteristics of domestic listed real estate companies and the status of their debt financing.Part three:Real estate listed company’s characteristics and debt financing present situation of china. This part is a transition section of the paper, which can foreshadow for the following descriptive statistics analysis and empirical analysis.Part four:Research Design and descriptive statistical analysis. this part describes the principle of this study sample selection and data sources and designs the explanatory variables, the explained variables and control variables, among which this article uses principal component analysis to calculate an integrated performance as explanatory variable; establishes model on the basis of the assumptions and variables designed; Finally, the explanatory variables, the explained variables and control variables are sub-annual descriptive statistical analyzed.Part five:The analysis and testing of the empirical results, as well as the policy recommendations. First, correlation analyzes the model involved for checking the existence of co linearity between the variables; followed by multiple regression analysis on2007to2011sample data of listed real estate companies in order to verify the robustness of the empirical results. This paper replaces the explanatory variables for robustness test. According to the status of the debt financing of listed real estate companies and the regression results, this paper proposes to expand debt financing channels of real estate listed companies, improve laws and regulations and promote the bank of strategic shareholdings recommendations; and finally specifies the limitations of this study.Based on the impact of debt financing on corporate performance of listed real estate companies, the conclusions are as follows:in the real estate listed companies, asset-liability ratio, long-term debt ratio, bank loans ratio are negative to corporate performance; the ratio of short-term liabilities, commercial credit ratio are positive to corporate performance.The main contribution of this paper is a comprehensive evaluation using principal component analysis on corporate performance, which overcomes the problem of incomplete representation of a single indicator; In addition, on the research perspective, scholars only researched the effect of the debt maturity structure on firm performance in the past, this paper studies the treatment effect from the overall level, the maturity structure and source structure of debt financing which broaden the research perspective of the company’s capital structure.