Research On The Influence Of Leverage Ratio On Business Performance In China's Real Estate Industry

After the outbreak of the financial crisis in 2008,the leverage ratio kept rising and staying high,leading to a substantial decline in the performance of various industries and affecting the development of the economy.The academic circle began to study the impact of leverage ratio on the business performance of enterprises,and the research results are also different.Some scholars believe that leverage ratio has a positive impact on the performance,while others believe that it has a negative impact,but the impact of leverage ratio on performance is not a simple linear relationship.Therefore,this paper chooses the real estate industry with relatively high leverage ratio and makes a detailed study on the impact of leverage on its operating performance.Firstly,this paper discusses the literature on leverage ratio,the relationship between leverage and performance,expounds the theoretical definition of leverage correlation in detail,and analyzes the theoretical basis of leverage correlation.Secondly,this paper explains the status quo of real estate listed enterprises' leverage in detail,and analyzes the mechanism of leverage affecting performance from three aspects: tax shield,signal transmission and bankruptcy pressure.Then,this article selects 128 listed real estate companies,collected data from 2007 to 2018,using a dynamic panel model analysis and threshold models explain variables leverage to be interpreted performance ROA,ROE,and throughthe robustness test,proves that there is nonlinear relationship between them,the inverted u-shaped relationship,when leverage at the threshold to the left,have positive effects on performance,when leverage at the right hand threshold,produces negative effect,when leverage threshold in the middle range,performance reached the maximum;Finally,according to the empirical results,when the leverage is too low,put forward the relevant leverage strategy;When the leverage is too high,put forward the relative deleveraging strategy,and finally,this paper puts forward some countermeasures and Suggestions to improve corporate performance,such as the diversification of corporate debt management financing and the management of government departments.