Abstract
The real estate industry is characterized by a high degree of financial intensity and is more significant in certain areas. The relative enterprises require certain financial ability and large shareholders’ controlling power to support their survivals and competitiveness. However, due to the multiple adverse impacts of current state policies on banks and private capital, the problem of capital restraints of real estate has become increasingly serious. From a corporate governance perspective, this paper studies the interactions among financial constraints, ownership concentration and corporate performance under different shareholding states: by analyzing the quantitative characteristics of equity structure and searching for the appropriate range of the largest shareholder holding ratio, which has considered both the financial sustainability and characteristics. It is found that raising the ownership concentration could enhance supervision effect rather than encroachment, effectively ease the financial constraints and improve the performance of enterprises, both of which are significant under high ownership concentration. Financial constraints play a significant intermediary effect in absolute holdings and have obvious regulatory effects in decentralized equity. Also, the mechanisms of ownership concentration are reflected in the strengthening of corporate supervision, reduced agency costs, improved operating efficiency, and increased investment attractiveness. The adjusted behavior adds to the responsibility awareness rather than free-ride psychology, forming a dynamic game on financial decisions. Their financial sustainability in areas would provide a nationwide reference for governance reform and managerial behavior.
Highlights
As the cornerstone of corporate governance, the ownership structure provides a realistic basis for the allocation of corporate residual control rights and residual claim rights (Wruck, 2014)
In the whole sample group, the mean return on equity (ROE) and its standard deviation are 0.092 and 0.111, respectively, indicating that during the sample period, real estate enterprises have a positive return on assets but with certain fluctuations
Multiple Regression Results-Assumption 4 According to the scale of enterprise assets, this paper divides them into three equal parts
Summary
As the cornerstone of corporate governance, the ownership structure provides a realistic basis for the allocation of corporate residual control rights and residual claim rights (Wruck, 2014). (3) As the foundation of corporate governance, the ownership structure has a strong correlation with corporate performance; the concentration of equity in China’s real estate enterprises is more common. In this highly capital-intensive industry, shareholders can effectively control the enterprise’s financial flow and business performance with the increase of the shareholding ratio. Y The number of years (Age) of the enterprise is a common control variable, reflects the development of the enterprise, business foundation, and the ability to resist financial risks to a certain extent; the cash holding set (CH) and net cash flow from operating activities (NCF) reflect the daily liquidity of the enterprise since their abundance could reduce the external financing pressure and alleviate the shortage of investment. For hypothesis 3, the mediating effect and the regulating effect of financial constraints are tested and subgroup regression is performed
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