Nonlinear Relationship between Debt Financing and Business Performance in Real Estate Companies with Different Growing Abilities

【Author】

Hui Wang;Hong Xu;

【Abstract】

Demand for funds is high for listed real estate companies.The degree of debt financing has a great impact on their business performance.This paper examines the relationship between debt financing and business performance under different growing abilities by building a panel threshold regression model for 107 listed real estate companies in China.It is shown that a negative declining effect exists between the rate of debt and business pe rformance.Also,there is a triple threshold effect for companies with different growing abilities.The negative influence decreases with the growing abilities of business.As a result,listed real estate companies should adopt appropriate debt financing scale based on their development levels in order to maximize the benefits.

【Keywords】

panel threshold model;;debt financing;;business perfo rmance;;growing abilities

References

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Springer Journals Database

Total: 15 articles

  • [1] Cao Tingqiu, Sun Wenxiang, Yu Jianxia, Capital Structure, Ownership Structure, Growth Opportunities and Firm Performance, Nankai Business Review,
  • [2] LIAN Yu-jun,CHENG Jian(Jinhe Center of Economics Research,Xian Jiaotong University,Xian 710049,China), Relationship between Capital Structure and Performance with Different Growth Opportunities, Modern Economic Science,
  • [3] Chen Deping & Zeng Zhihai, The Interactive Relation between Capital Structure and Corporate Performance——Empirical Test Based on the Listed Companies on the Growth Enterprise Market, Accounting Research,
  • [4] Bruce E. Hansen, Threshold effects in non-dynamic panels: Estimation, testing, and inference, Journal of Econometrics,

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