Research On The Influencing Factors Of Capital Structure Of A-share Real Estate Enterprises In China

The American economist David Durand first proposed the concept of capital structure and put forward the theory of early capital structure.MM theory marks the beginning of the development of the theory of early capital structure.As the hypothesis is relaxed,trade-off theory emerges.After the 1970s,new capital structure theories such as information transfer theory,ordered financing theory,control rights theory,and market selection theory emerged.The existing research on capital structure is mainly conducted in two aspects:on the one hand,it studies the influence of capital structure on the value of the company,and on the other hand,it studies the factors affecting the capital structure.The influencing factors of studying the capital structure are based on the fact that the capital structure of a company is not only affected by the tax shield effect and the bankruptcy cost,but also influenced by various factors of the company itself and the economic environment.The academic community has done a lot of academic research in order to confirm this point of view.Corporate financing is of vital importance to real estate companies.The development of the real estate industry is inseparable from capital operations.Real estate development lacks core technology.If the capital operation is reasonable,it can build out the same types of houses with competitors based on highly publicized information technology in the industry.At the same time,it is difficult for real estate companies to expand their scale in the same city to achieve economies of scale based on the specificity of the land.Housing is one of the products with the lowest repeat purchase rate.Therefore,brand loyalty is difficult to maintain.Brand premium is very difficult to realize.The real estate industry is more product competition.From this point of view,capital operations have a crucial impact on real estate companies.China's A-share listed real estate companies have more extensive financing channels.Compared with unlisted real estate companies,they can raise funds by issuing securities,allocating shares and issuing convertible bonds in the securities market.However,when the listed company's capital structure is not properly managed,it will face the issue of control rights.The influencing factors of studying the capital structure of A-share listed companies have stronger practical significance.National related policies have a direct impact on the financing channels of real estate companies and thus have an impact on the capital structure of real estate companies.A-share listed real estate companies can raise funds,issue shares,and issue convertible bonds to raise funds.The state can formulate relevant policies to adjust these financing channels.In addition,changes in the real estate industry's prosperity,money supply and interest rates will also indirectly affect the financing options of real estate companies.According to the trade-off theory,preferential order financing theory,and control rights theory,it can be assumed that certain internal factors of the company will also affect its capital structure.When companies weigh the bankruptcy costs and tax shield revenues,they will consider the impact of the company's size,actual tax rate,and inventory size on these two aspects.The degree of ownership concentration and dividend payment of an enterprise can,to some extent,reflect the issue of corporate control.When the retained earnings of the enterprise are relatively large,based on the preferential financing theory,the asset-liability ratio of the enterprise should be lower.Therefore,the profitability,solvency,operating ability,and growth of the enterprise will affect the capital structure of the enterprise.This article first reviews the development of capital structure theory by reading domestic and foreign literatures,and summarizes the literature on the factors that influence the capital structure.Then analyze the current situation of financing of domestic real estate companies,analyze their sources of financing,and analyze the changes in corporate financing structure based on changes in real estate policies.Then,it analyzes the factors affecting the capital structure of real estate companies,and considers the internal and external factors to elaborate their internal logic.Finally,through empirical analysis,we use 123 real estate listed companies,financial data released in 2010-2016 and relevant economic data to conduct statistical tests.It can be found that there is a significant positive correlation between firm size,equity concentration,money supply,long-term interest rate,and capital structure.There is a significant negative correlation between operating capacity,solvency,inventory size,short-term interest rates and capital structure.The profitability,actual tax rate,growth,dividends,and industry prosperity have no significant effect on the capital structure.In addition,policies have a direct impact on the financing channels of real estate companies,which in turn affects the company's capital structure.This conclusion can provide reference for enterprises to adjust the capital structure,the government to formulate industry-related policies and banks to manage real estate business loans.Specifically,companies need to increase their profitability,use internal sources to raise funds as much as possible,reduce reliance on external financing,reduce their asset-liability ratio,and thus control operational risks.The government needs to encourage financial innovation,reduce government intervention,and actively play the role of the market.Banks should not only attach importance to credit review,but also keep track of the development of real estate companies and keep the risks to a minimum.