Research On Financing Preference Of Real Estate Enterprises Based On Pecking Order Theory

The financing of China’s real estate industry has a special performance,such as large demand for credit funds,close relationship with the external economic environment,and financial policy has a greater impact on it.There are preferences in the financing behavior of enterprises,and the choice of financing is mainly based on business conditions and capital needs.which is influenced not only by internal factors,but also by external environment.This paper systematizes the related theories of capital structure,Among them,Pecking Order Theory considers information asymmetry on the basis of traditional capital theory,and believes that when enterprises choose financing,they generally follow the order of internal financing first and then external financing.And in external financing,generally follow the order of debt financing and then equity financing.This paper studies on the basis of this theory.First of all,we collect,analyze and describe China’s real estate industry for financing options and find that there is a strong preference for foreign financing,and debt financing accounts for a large proportion of foreign financing.Then the paper makes a comparative analysis of two real estate enterprises with different scale and development stages,and finds that in addition to the tendency of creditor’s right financing,there are also differences in the preference of endogenous financing and equity financing,through the analysis and summary of the causes of this financing preference,A company with a strong ability to obtain profits and a high level of management has a large internal financing capacity,enterprises with large scale,strong debt-paying ability and stable development are more likely to obtain external financing.In addition,external environment,management style,ownership structure and other factors will also affect the financing preference of enterprises.At the end,combine the conclusions and make simple suggestions,hoped that may provide certain reference value for our country real estate enterprise’s financing decision.