Research On The Relationship Between Housing Price Changes And Corporate Financing Constraints

Real estate is the pillar industry in China.In the past ten years,the house prices of Chinese cities have shown an upward trend.From the perspective of enterprises,financing constraints are an important factor that restricts the development of enterprises.Enterprises in reality are faced with different levels of financing constraints.This is because the perfect capital market does not exist in reality.Information asymmetry and agency problems will cause external financing costs to be much higher than internal capital costs.In the case of our country,the financing channels are relatively simple,and the indirect financing methods based on bank loans have long dominated the financial market.Due to information asymmetry and agency problems,certain mortgage collateral is required when borrowing from a bank.When the value of the mortgage assets increases,the borrowing capacity of the enterprise and the bank's willingness to lend will increase,which will affect the financing constraints of the enterprise.This is the mortgage guarantee effect.In recent years,more and more scholars have paid attention to the transmission effect of assets value changes on micro-enterprises.However,the existing articles mainly study the impact of rising house prices on corporate investment and financing or corporate innovation behaviors,while the research on whether the changes of housing prices can really influence the financing constraints of enterprises and the channels through which to influence financing constraints is relatively small.Therefore,this paper analyzes the relationship between the house price and the corporate financing constraints through the fixed-effect model,using the data about buildings traded in the Chinese A-share market during 2003-2017 combined with the house prices of 35 Chinese large and medium-sized cities.The results of the study indicate that:First,the mortgaged house value would increase when the house prices are rising,therefore risk of Credits will be reduced,it is conducive to alleviating the financing constraints of Debits.The empirical research also proves that there are obvious mortgage guarantee channels in China,Second,through this channel,rising house prices will have different effects on different listed companies: Compared to the asset-light companies,the heavy asset companies can decrease the financing constraints by mortgaging their assets when the house prices are increasing.Third,when the house prices are increasing,the financing constraints of listed companies with or without the investment real estate will be reduced,but the financing constraints of non-investment real estate companies are more than that of investment real estate companies.Fourth,judging from the regional,when the housing prices are increasing,the financing constraints of enterprises in the central region of China have reduced the most,secondly is the eastern region,and the financing constraints of enterprises in the western region have eased the least.This paper combines macro factor housing prices with micro factor corporate financing constraints,and enriches the research results of macroeconomic changes on micro-enterprise transmission mechanisms.Through the research on the financing constraints of different enterprises,it is of great significance to formulate relevant policies to improve the financing environment of Chinese enterprises,optimize the financing structure,and thus enhance the business performance and competitiveness of Chinese enterprises.