An empirical research on relevance between ownership structure and corporate performance of real estate companies in china: based on real estate listed companies in shanghai and shenzhen

Translation from original language as provided by author

With the commercialization of China's urban housing reform continued to deepen, real estate enterprises which are the main constructor in house building industry, have also continually moved forward under the market economic environment. Real estate industry is the basic industry of the national economy, which has to take lots of important social responsibility. It has a great significance to improve the level of real estate development and promote a healthy development of the real estate industry. Equity structure is the basis of corporate governance, scholars who are in the study of corporate governance has had some useful results on the research of the ownership structure, but the aspects of research methods are still not good enough. On the other hand, after the split share structure reform, the original non-tradable shares have become to tradable shares which have limitation on trading, and there are considerable portion have fully been tradable, which means corporate equity structure has changed fundamentally. As a result, we are able to get more scientific and precise data to research on the relationship between ownership structure and corporate performance. At the beginning, we study a lot of existed relevant literatures on the relationship between ownership structure and corporate performance. Then, we straightened out those relevant theories of corporate governance, considered real estate enterprise reform in our country. This paper have done an analysis of the characteristics of real estate industry and the corporate governance in china, so as to construct a suitable model to analyze the relationship between the real estate company's ownership structure and corporate performance. We have collected before and after the split share structure reform's (from 2001 to 2008) data of real estate listed companies' ownership structure and corporate performance. By comparing the difference on operating conditions before and after the change, we used multiple regression method to construct a multiple regression model to analyze the intrinsic link between real estate listed companies' ownership structure and corporate performance, in order to find an optimal ownership structure, which could improve the level of real estate corporate governance. The empirical study shows that in the real estate industry, the proportion of state-owned share and corporate performance has no obvious correlation. The reduction of state-owned shares might not help to improve corporate performance. On the contrary, a certain proportion of state-owned shares can help real estate enterprises develop a more standardized operation and management system. A high degree of concentration in the company's equity structure may help improve the managerial structure. Too much advantage degree that the largest shareholders have is not conducive to corporate governance. The ownership concentration has reverse "U" relationship with corporation performance. The more rate the largest shareholder holds, the worse the real estate listed company