Analysis Of The Relationship Between Working Capital Management And Corporate Performance

In recent years,In order to curb real estate bubble and lead the real estate industry sustained and healthy development,a number of macro-control policies have been introduced by our country,such as the country eight,the country six,the country eleven and two-way regulation,which effectively promote the healthy and orderly development of the real estate industry.However,it also exacerbated the impact of macroeconomic policies on the real estate industry.The unstable macroeconomic environment increased the cash flow volatility and financing costs,and exacerbated the financing constraints of real estate enterprises,which made the real estate industry be facing more severe financial environment and higher cash management requirements.In addition,the more and more standardized market and rational buyers of the real estate industry makes the real estate industry huge profits era ended.The level of competition intensifies.The importance of internal management to improve business performance and competitive advantage becomes more and more obvious.Fund management is priority among internal management,and working capital management is an important part of capital management.Under this context,this paper studies the relationship between working capital management and corporate performance in the real estate industry,in order to provide some guidance for the real estate industry working capital management.This paper,taking listed companies of real estate industry in Shanghai and Shenzhen Stock Exchange between 2010 to 2015 as the research sample,studies the relationship of enterprise working capital management and corporate performance from the perspective of channels and financing constraints by multiple static panel regression model.The study found that there is a significant positive correlation between enterprise performance and working capital management performance for real estate listed companies.There is a significant positive correlation between the production channel working capital management performance and enterprise performance.There is a negative correlation between purchasing channel working capital management performance and enterprise performance,and there is a positive correlation between marketing channel working capital management performance and corporate performance,but the correlation between these two channels are not significant.According to the standardized regression coefficient,the effect of the production working capital management performance on the enterprise performance is the biggest in the three channels.It shows that the production working capital management is thekey area of real estate enterprises.From the aspect of financing constraints,there are significant positive correlation between working capital management performance and the enterprises performance for enterprises with financing constraints which includes small scale private enterprises,small scale state-owned enterprises and large private enterprises,while large-scale state-owned enterprises which don't exist financing constraints shows no significant correlation between working capital management performance and the corporate performance.It proves that the financing constraint strengths the dependence for enterprises internal cash flow,resulting in the saving effect of shorter working capital turnover and improving working capital management performance is more obvious.In addition,there are some differences in correlation between channels working capital management performance and the corporate performance for the listed companies under the different financing constraints.The results show that the real estate enterprises should pay attention to the working capital management,especially the production working capital management,and choose the key area of working capital management with the level of their financing constraints.