The Empirical Research Of Debt Financing Governance Based On The Listed Real Estate Companies In China

The real estate industry has developed with the economic recent years, and it issubject to the public’s attention. As a scarce resource, the real estate industry isclosely related to the social and economic development.It has a pivotal position inthe construction of the city and improving people’s living environment. Real estateindustry has been developed into a common topic. The entire operating areas willrequire substantial capital investment, so its financing structure is particularlyimportant. And in the real estate industry insiders, there have been a very interestingphenomenon. The ratio that real estate companies dependent on bank financing is ashigh as70%to80%. With the real estate market becoming more heat the morespeculation, the state has adopted a series of macro-control policies, attempting tocontrol soaring prices. Faced with such harsh macroeconomic environment, China’sreal estate enterprises should take what kind of measures to deal with the toughmacro control environment. And how to arrange the debt financing structure to copewith the increasingly grim situation. As a starting point, this article researched onthe corporate governance effect of debt financing based on China’s real estate listedcompanies.This paper selects the real estate companies listed on the Main Board issuing Ashare as the research object. Respectively research from three aspects, that is therelationship between debt levels, debt maturity structure, the sources of debt andcorporate performance. First of all, descriptive statistical analysis is made toresearch on the debt financing status. The result turns out that asset-liability ratio ofChina’s real estate listed companies is generally high.And the average balance is5percentage points higher than the one of other industries listed companies. Amongthem, proportion of current liabilities financing is high but the long-term debt ratiois relatively low. The main methods of debt financing are bank loans, accountspayable and receipts in advance. Then using multivariate regression model toconduct a comprehensive systematic quantitative analysis from three aspects of thelevel of debt, debt maturity structure and sources of debts.The empirical results show that the higher asset-liability ratio is, the lowerperformance will be. Regarding debt maturity structure, the higher short-term debtratio is, the lower real estate company’s performance will be. While the higherlong-term debt ratio is, the better real estate enterprise performance will be;Relating the source structure of the debt, bank loans as well as advances ofconstruction companies are positively related with corporate performance and thereceipts in advance and corporate performance was negatively correlated. According to the above conclusions, finding out a debt financing structure which can improvethe company performance. Then proposing appropriate policy recommendations ondebt maturity structure and debt sources f structure according to the conclusions.