An Empirical Study On The Business Performance Of China’s Listed Companies Involved In Rerl Estate Derelopment

Recent years, due to the high profits of real estate，in order to find "a neweconomic growth point", a large number of listed companies whose are indirectlyrelated to real estate enter the real estate sector. According to the Green Paper onHousing published by the Chinese Academy of Social Sciences：Recent years, thedevelopment of the real estate market is increasing tremendously. Among the A-sharelisted companies, the number of companies involved in the real estate industrypresented a tendency of straight climb. China’s listed companies which involved in thereal estate industry cover a wide range as a whole, this fact indicates that real estate hasbecome the first choice for many enterprises’ diversified development. But with theregulation of the tight schedule of the national housing policy, deepening the propertymarket adjustment, the real estate that once regarded as the "meat and potatoes" hasbecome a "hot potato", many companies competing to sell the real estate equity or thereal estate projects. This "new trend" has subjected to the widespread concern anddiscussion of social public.Most of the listed companies on two places in Shanghai and Shenzhen of ourcountry involve in the real estate industry at different degree, and its impact on theenterprise performance has been a hot research topic. However, whether the listedcompanies involved in real estate improve the enterprise performance or enhance thecompany’s profitability is not very clear, and literatures of them less. Therefore, in orderto get a more scientific conclusion on the performance of the enterprises indirectlyrelated to real estate, it is quite necessary to be an objective assessment of the economicresults of China’s listed companies involved in real estate.This paper main discusses the effect of enterprises those indirectly related to realestate involved in real estate. Firstly, the definition of the listed companies whichinvolved in real estate and the degree of involving. And then, through the comparisonwith the difference of firm performance before and after involved in real estate,involved in real estate and non-involved in real estate, involved in real estate andProfessional real estate companies. Form these aspects to study enterprises indirectly related to real estate impact on firm performance.Methods by non-parametric tests and multivariate regression analysis under theSPSS17.0and Eviews6.0software, this paper makes an empirical analysis on it basedon cross panel data of220listed companies at Shanghai and Shenzhen from2002to2010. Empirical results show that the performance of the enterprises indirectly related toreal estate could promote the companies’ accomplishments, but the development spaceis limited. The performance of the enterprises indirectly related to real estate better thanthe companies who non-involved the real estate, but firm’s long-term performance wasopposite. As to the gross profit rate of the real estate business, the result of theenterprises indirectly related to real estate is superior to the Professional real estatecompanies.The research is diversified and transition theory applied in the real estate industryexpansion and concluded not only enrich and develop the diversification andtransformation of research results, causing people to "involving housing" boomreflection, but also for the industrial strategy of listed companies selection, outsideinvestors to make stock investment decisions, the Government enacted the real estatemacro-control policies to provide a reference.