Study On Factors Influencing China’s Highway Listed Companies’ Financial Performance

After nearly thirty years of the highway development, the total mileage of the highway has surpassed the United States, ranking the first one in the world. The expressway has made a great contribution to improve our people’ living standards; at the same time the financial situations of the highway corporations draw more and more attention. There’s a lot of news about the highway ―excessive profit with a great deficit‖ in mass media, thus, the highway industry has become more and more mysterious in the public imagination. In this context, this paper obtaines the financial performance of listed companies in China’s highway comprehensive analysis and evaluation by applying the technique of factor analysis, and as a basis for in-depth analysis of the factors affecting its financial performance.This paper reviews the relevant literature on the financial performance of the domestic and foreign experts and scholars. Through the summary and combination about the literature, this paper chooses 15 highway listed companies, with its financial figures from year 2006 to 2013, and ultimately selects 14 financial indicators to represent the financial performance of listed companies in China’s highway. This paper uses the objective weighting method, the factor analysis method, to conduct the empirical analysis with the 14 financial indicators, and get the final results of the consolidated financial performance of each company’s score. This paper selects the ownership structure, board characteristics, company incentive system, capital structure, company size, and external factors, a total of 10 indicators as explanatory variables to the consolidated financial performance score of explanatory variables, then establish a multiple linear regression. The shareholding ratio of first major shareholder, the shareholding ratio of the top five shareholder and state-owned shares are significantly negatively correlated with the companies’ financial performances. At the same time, there are two external factors, GDP and the location of the listed companies, It has negative correlation on its financial performance. On this basis, the Conclusion and Outlook section points out the main conclusions of this paper and a brief proposal, innovation and limitations of this study, then concludes research prospects related issues, hoping for further research in this area with a bit ideas and directions.