The Financing Structure Factors Of Listed Construction Companies

As one of the main industries of the national economy, construction industry is an important material production sectors, closely related to the improvement of the country’s economic development and people’s lives standard. The shortage of funds has always been a troubled bottleneck in the development of China’s construction enterprises, especially in recent years with large construction companies gradually developing into general construction contract, BT/BOT/PPP and other models, as well as corporate horizontal and vertical integration and even urban operating strategy development. All of these new formations raise higher requirements to their financial strength and ability. What’s the construction status of the financing structure of listed companies? What are the factors affecting the financing structure? What are differences of financing structure between domestic and international listed companies? What measures should be taken to optimize the current capital structure? This paper launched an in-depth study into the financial structure.Based on the previous study into the structural factors affecting financing correlation study, the paper launched on the empirical analysis into financing structure of domestic and foreign construction companies, by using SPSS statistical analysis of fifteen selected variables, intended to find out the gap of the financing structure of domestic and foreign outstanding architectural companies and propose structure optimization methods. Using financial data of36construction companies listed in Shanghai and Shenzhen in the year of2007-2013and the financial data of2012world’s five hundred eight foreign construction companies, the paper employed empirical study using SPSS statistical analysis software. The conclusion comes as following:For domestic listed construction companies, the debt-to-asset ratio is in a significant positive correlation with the size and ownership concentration, and in a negative correlation with short-term solvency and profitability. The long-term solvency and operating capacity factors is less correlated with the debt-to-asset ratio, as well as the growing ability and the outstanding share proportion. Nevertheless, for foreign outstanding construction companies, the debt-to-asset ratio exhibits a negative relationship with the cash solvency, asset guarantees and operating capabilities, positively with the size, profitability and growing ability. From the above, we can come to the conclusion that the main difference lies in the adverse effect of profitability and operating capacity to debt-to-asset ratio. Foreign outstanding construction companies put more importance to the cash solvency and the growing ability when determining the financial structure, while more attention comes to the size of enterprises for domestic construction companies.Combined with the empirical study above, here comes to five suggestion to optimize the financing structure of domestic construction companies:1) Pay attention to the size2) Improve the short-term solvency3) Strengthen the profitability of corporate4) Lay emphasis on the solvency of cash and the growing ability5) Optimize the ownership structure...