The Governance Effect Research Of Debt Structure On Overinvestment

In2013, the national real estate development investment continued to maintain a high growth rate, in2013year-on-year growth of19.8%, in2012year-on-year growth of16.2%. But about the real estate bubble speech is frequency to see in the press, These years, the frequent "Ghost City" in several cities aggravated concerns on the market of the real estate industry, and the extremely high Asset-liability ratio in the real estate industry compel this industry facing a high risk of bankruptcy. So, is debt to curb excessive investment, or, act as a promote function? What is its internal mechanism? How the debt maturity structure affects the choice of investment strategy? which is the agent problem caused more serious conflicts of interest? Are the conclusion derive from the developed country with mature capital market as the background of this study applicable to developing countries and countries with economies in transition? The answers to these questions still need to be further empirical studied.To verify the above question, this paper, according to investment theory and governance effect of debt, pointing at listed real estate companies, using the empirical research method reveals the relation of debt structure and excessive investment, and empirically tests this effect and function.This paper follows the path of "Literature review-Theoretical analysis-Model building-Empirical tests-Policy recommendations". Firstly, through literature analysis, by summarizing, analyzing and reasoning on the national and international research fruits, this paper examines the relationship of debt structure and efficiency of investment. Secondly, this paper illustrates the influence of the system in our country on the relationship between debt structure and over investment. Thirdly, according to the sample of real estate listed companies of2009-2013, and by empirical models, this paper verify the following issues:whether over investment behavior widespread in China’s real estate industry? Whether the total debt could inhibit the excessive investment or not? Research on debt inhibit the over investment from the perspectives of sources of debt and debt maturity structure. Finally, this paper come up with corresponding policy proposals based on the above testing results.This study conclude that over-investment exist in the real estate listed companies, as for the source of debt, bank debt and commercial credit cannot effectively curb excessive investment; As for debt maturity structure, long term liabilities curb excessive investment significantly, this thesis is trying to analyze the reasons of the phenomenon, one of the reasons is the soft budget constraint. As the real estate business in stimulating the local economy and plays a vital role in local government development, because of policy intervention, making banks bear too much burden of policy, under soft budget constraint background, liabilities can not play governance effect.The main innovation lies in:in previous studies, to test the debt governance role still mainly take asset liability ratio as the explanatory variable, study on the governance effect of different source and different term debt remains to be further. According to different sources of debt divide debt into bank loans and commercial credit, according to debt maturity divide debt into short-term liabilities and long-term liabilities, so as to explore what characteristics of the debt enhances the sensitivity of the enterprise investment behavior; and the previous research mostly take manufacturing listed companies as research samples, as for the rapid development of the real estate industry in recent years, considering its important role in boosting the local economy and its funding sources are highly dependent on debt, it is necessary to research the debt governance effects from the perspectives of debt source and debt maturity.