The Research On The Relationship Between The Capital Structure And Performance Of Real Estate Listed Company

The real estate industry is the second largest industry after financial industry inthe listed companies of China financial assets and liabilities ratio, which has apivotal role in the economic development of our country. Taking the real estate listedcompanies as the research object, this paper mainly talks about the influence on thecompany performance from the point of view of the real estate capital structure oflisted companies. According with the characteristics of the industry will moreaccurately and effectively reflect the industry’s capital characteristics andperformance relationship. On the basis of the existing theory, in view of therelationship between capital structure and corporate performance in the real estateindustry listed company the author does further analysis and research. According toChina’s current national conditions, this paper discusses what kind of capitalstructure in real estate industry is the best, and how to construct the problem of theoptimal capital structure is very important and practical significance.Taking the western developed countries system as the research background,capital structure theory is very different with the environment of listed companies inChina. The existing capital structure theory cannot fully explain the capital structurecharacteristics of listed companies in China, and the theory shows that the capitalstructure of listed companies in China cannot apply directly to the background ofwestern developed market. On the basis of MM theory and the theory in the currentresearch at home and abroad, taking into account the trade－off theory, peckingorder theory, agency costs theory and so on, in accordance with China’s currentnational conditions, this paper discusses what kind of real estate industry capitalstructure is the best, and how to construct the optimal capital structure of theproblem is very important and practical significance. In the current theory andempirical basis at home and abroad, this paper discusses how to use the Chinesecapital market, and develop the financing channels, to build a good capital structure of listed companies relevant to China’s political system and economic situation. Sofurther research on relationship between the capital structure and corporateperformance in our country’s real estate can have certain theoretical significance,also can add empirical studies of relationship between capital structure and corporateperformance.The company’s capital structure is formed by the financing activities. Thedifferent ways of financing and different combination determines the company’scapital structure and change. There are many ideas and methods to evaluate theperformance of the company. In its development process, general idea is from asingle index to comprehensive index, from financial indicators to combineddevelopment of financial indicators and non-financial indicators. In many factors ofaffecting the performance of companies, this paper, mainly from the financialindicators, comprehensively considerate the assets operation ability, profitability,debt paying ability, and other important factors.This paper mainly uses principal component analysis, different from generalresearch methods, during the research process. It analyzes the correlation betweenthe company performance, asset liability ratio and long-term debt ratio. In usualstatistical regression methods, the choice of index often has subjective factors.Namely, the influential factors of all possible performance indicators are covered in.So the result of general regression analysis method is average, and overall optimalityand objectivity is difficult to reflect. Therefore, the old weighted average algorithmis unsuitable. To solve this problem, I adopt the method of principal componentanalysis. My purpose is to select the most important factors to explain the capitalstructure influence from many influential factors on capital structure of listedcompanies. I abandoned complicated methods and models in the previous study,chose the simple and feasible method, and correct the old methods of principalcomponent analysis. Thus, the result can be more accurate.The author makes a conclusion through the empirical research. That is, in thelisted companies of real estate, the company performance and asset-liability ratio arepositively related, company performance and long-term debt ratio are positively related, and the capital structure is in proportion to corporate performance. In theaspect of theory research, current theories provide a reference frame, prove thatoptimize capital structure can improve the company performance, and further showthat listed companies of real estate need a standard, reasonable capital structure tomake this industry develop continually and healthily.