Chinese Real Estate Industry Research Articles

The Internal Control Management of Chinese Real Estate Industry: A Case Study of Yinfeng Group, Shandong

With the development of China's economy, the number of policy supports provided by SMEs to private enterprises has also increased yearly. Their status and contribution to the national economy cannot be ignored. However, most private enterprises lack an understanding of small and medium-sized enterprises (SMEs) or do not comprehend the internal control mechanisms necessary to formulate and implement an effective internal control management system. This lack of understanding is the main bottleneck preventing enterprises from becoming larger and stronger. Enhancing internal management is particularly beneficial for improving the risk-prevention capabilities of small and medium-sized private enterprises, thereby facilitating their growth. This paper analyzes the problems faced by small and medium-sized private enterprises, using the internal supervision of the internal control system of Yinfeng Group as a case study. Based on internal control's basic and practical meanings, the paper provides suggestions to improve internal control management.

A Study of Debt Problems in the Chinese Real Estate Industry

This paper will focus on real estate industry in China, uses Evergrande group as a case to compare with another Chinese real estate company Vanke and a real estate company of United State which is AvalonBay Communities, Inc. This paper will introduce the background of real estate industry in China, and base on the case which is bankruptcy of Evergrande Group to throughout the causes find out the issues of real estate in China, in causes is discuss of three factors: Industry characteristics, financing channels, loan evaluation, analysing what make Evergrande can owe a massive $2.4 trillion in debt, and analysing the United States real estate industry not usually having such high leverage. Essay will tell the strategy of real estate companies in China usually do. The strategy led to Evergrande group bankruptcy and compare with Vanke uses what strategy avoid debt crisis. Finally, conclude the chaos of real estate industry in China reflected by Evergrande group, recognise the issues of Evergrande group and prevent the significant consequence occur again.

Females on Boards and Default Risk in the Chinese Real Estate Industry

This study examines the relationship between female directors on boards and default risk in the Chinese real estate industry. While gender diversity is commonly viewed as an effective governance tool in boards to lower the risk of general market firms, we find that there is little influence with female directors in mitigating the default risk in our sample Chinese real estate firms. Nonetheless, once we partition our sample firms into state-owned enterprises (SOEs) and non-state-owned enterprises (non-SOEs), we observe a significant influence of female directors in lowering the default risk of non-SOEs. We further find that the significant relationship between female board representation and default risk in non-SOEs is attributed to non-SOE firms with high financial constraints and a critical mass of female directors. Our results are robust with a matched sample design, an instrumental variable approach, alternative measures of key variables, and inclusion of additional controls. Overall, our findings highlight the particular circumstances in which board gender diversity is effective in mitigating default risk in the unique environment of the Chinese real estate industry.

The Effect of CFO Characteristics on the Quality of Real Surplus: A Case Study of the Chinese Real Estate Industry

The article selects the data on the characteristics of finance chief executive officers of real estate listed companies from 2018 to 2022 as a research sample and explores the relationship between the heterogeneous characteristics of finance executives and concurrent positions and real surplus management from five perspectives: gender, age, tenure, educational background, salary and compensation of finance chief executive officers. The study shows that: in the real estate industry, gender, salary, and compensation of financial CEOs are not related to surplus management; age is significantly positively related to surplus management in the case of concurrent directorship and significantly negatively related in the case of non-concurrent directorship; tenure of financial CEOs is significantly negatively related to surplus management in the case of non-concurrent directorship; and educational background of financial CEOs is significantly positively related to surplus management in the case of non-concurrent directorship.

중국 주택시장의 비대칭적 변동성에 관한 연구

Purpose – This study analyzes asymmetrical volatility in the Chinese housing market. Particularly, it aims to find whether housing market returns are positively or negatively related to subsequent volatility. Design/Methodology/Approach – The GJR-GARCH model applies to returns on the Chinese housing price index from January 2006 to December 2022. To consider the possibility that the nature of asymmetry depends on the sample period, we repeatedly estimate multiple sub-samples by increasing the end point by one point with the starting point of the sample fixed at January 2006. The period of January 2009 - December 2022 was also analyzed, using January 2009 as the starting point, to exclude the impact of large negative returns during the 2008 global financial crisis. Findings – First, t he nature of a symmetry varies g reatly depending on t he e nd point. Second, when January 2006 is the starting point, a negative relationship between returns and subsequent volatility referred to as typical asymmetry is found for most end points between December 2009 and May 2011, which seems closely related to large negative returns during the 2008 crisis. Third, when January 2009 is the starting point, a positive relationship between returns and subsequent volatility called reverse asymmetry is revealed when the end point is between December 2012 and November 2013, and between August 2016 and December 2022. Research Implications – The reverse asymmetric volatility for the period of 2009-2022 points to the possibility of speculative bubbles in the housing market, supported by the crisis in the Chinese real estate industry from 2021 to 2023.

Analysis of Real Estate Risk Analysis & Countermeasures Based on the Chinese Market

Chinese real estate is an important pillar of the economy, and the risk of it has shown a greater risk potential in recent years due to the impact of COVID-19. This study investigates the risks of Chinese real estate market and analyzes the corresponding risk-solving countermeasures in combination with government policies to achieve the smooth operation of the real estate market. Firstly, the study summarizes and investigates the risks of the real estate market in recent years, and comes up with four risk factors of the real estate market in China. Secondly, the study searches government policies in Chinese real estate industry through qualitative analysis and then analyzes the effects of their implementation. On this basis, the paper proposes a series of targeted countermeasure suggestions. According to the analysis, it is expected to put forward feasible proposals and preventive measures for the risks in Chinese real estate market, in order to promote the sound development of real estate enterprises.

Development Status of Chinas Real Estate Industry

The real estate industry has always been a significant factor in the Chinese economy which can be easily affected by many sectors such as demand and supply imbalance, aging, and information asymmetric between producers and consumers. Under the new economic situation in China, the development and innovation of the real estate industry play a crucial role in the Chinese economy. The paper explores the future trend of real estate by analysing the current situation of the Chinese real estate industry through a method of literature review and data analysis. The result shows that the first, the house vacancy rate is a main factor that the government should control in order to balance the demand and supply. The price of the house would decrease caused by the unbalanced supply and demand. Secondly, the high unemployment rate would also affect the demand, which could lead to decrease in house price. Lastly, the uneven development between different areas would lead to negative impact for the real house industry as well. This paper find that government intervention plays a significant role in the control of demand and supply of the real house industry and The real estate industry ushered in a new stage and began to explore new ways of development that fit publics needs.

Research on the Current Situation, Problems, and Prospects of the Development of Chinese Real Estate Enterprises under the New Situation Take Yuexiu Property as an Example

As the Chinese real estate industry has experienced a rapid development phase, hidden risks and issues have started to emerge in its industry. Factors such as insufficient population demand, the issue of industry bubbles, companies facing insolvency, and the global economic downturn have led to the closure of many private real estate enterprises and a downturn in the overall real estate market. Taking Yuexiu Property as an example, this study analyzes and summarizes its financial performance and strategic operational direction, in order to derive operational strategies applicable for real estate companies to cope with the new situation. The study found that the growth momentum of the real estate market under the new circumstances is insufficient, and companies cannot rely on high leverage to acquire more land reserves. Deep transformation and development into integrated development operators, as well as diversifying the business chain, are the optimal strategies for all companies in the current situation.

The Impact of COVID-19 on Evergrade: A Case Analysis

Due to the impact of the epidemic, the entire Chinese real estate industry is in a downturn, especially the Evergrande Group. Evergrande Group plays a vital role in the real estate industry, and Evergrande's debt crisis has also overwhelmed many real estate developers. This article analyzes the real estate industry, and Evergrande's financial problems and corporate management problems to see the problems that Evergrande has during the epidemic. Although Evergrande Group has made a lot of efforts for transformation during the epidemic, it still cannot make up for its huge loopholes. This can be attributed to its long-term debt, low profitability, prominent financial problems, insufficient cash flow and the adverse impact of its diversification strategy. Under the epidemic, it failed to transform and go bankrupt. According to the analysis, this article reflects and summarizes the reasons for Evergrande Group's failure. These results shed light on guiding other real estate companies and regulatory agencies to avoid mistakes and prepare for sustainable development in the future.

Geographic Diversification and Real Estate Firm Value: Where Firms Diversify Matter

This study explores an important determinant of geographic diversification for real estate firms by considering the regional development disparities in their asset locations. We conjecture firms have more access to resources and investment opportunities in regions undergoing development, but they also face stiffer competition for resources at these locations. Moreover, transaction costs vary with regional development. Utilizing the Chinese setting that exhibits significant development differences across regions, we found that the location of geographic diversification significantly impacts firm value. Specifically, our findings show a higher exposure to the developed Chinese cities, as measured by the City Momentum Index (CMI), reduces the benefit of geographic diversification. We further show that the mitigating effect is stronger for the Tier 1 cities, supermomentum cities, and cities that exhibit high price growth in the real estate sector. This means the benefit of geographic diversification comes from variations in industry development and socioeconomic momentum, and is therefore not dependent on only the developed cities. Overall, our study implies high market competition and established institutions in the developed regions in China actually lower diversification benefit. In so doing, we highlight the importance of considering local institutional differences in ascertaining the benefit of geographic diversification for the Chinese real estate industry.

Estimating market power under a nonparametric analysis: evidence from the Chinese real estate sector

The traditional Lerner index is limited in its capacity to estimate the level of competition in the economic sector from the perspective that it mainly focuses on the overall level of market power for each individual decision-making unit. Recently, Fukuyama and Tan (J Oper Res Soc, 73:445–453, 2022) estimated the Lerner index by applying the nonparametric data envelopment analysis (DEA) to calculate the marginal cost, which is an important component in the estimation of the Lerner index. Our study further extends the study of Fukuyama and Tan (J Oper Res Soc, 73:445–453, 2022) by estimating the marginal cost under the DEA in a multi-product setting. Our proposed methodology benefits from the ability to find positive marginal costs for all the products and specifies all decision-making units are profit maximizers. In order to achieve this, the marginal cost is estimated by referring to the nearest point on the best practice cost-efficient frontier for the profit-maximizing firms. We then apply our innovative method to the Chinese real estate industry. The result shows that the Chinese real estate industry has higher market power in the residential commodity housing market than that in the commodity housing market. This is also the case for different geographical areas in China. Overall, for both of these two different markets, the level of market power experiences a level of volatility.

Analysis of Real Estate Industry Based on H-P Filter and Tobit Model—— cited 3,614 trading days for 15 companies

As an industry to enhance the national economy and improve people's lives, it is of great significance to accurately analyze the stock price of the real estate industry. Based on this, this paper takes 13 listed companies in the Chinese real estate industry as an example, using the H-P filtering method, OLS regression, and Tobit model to analyze the price of the real estate industry. There are three main research results: (1) After HP filtering analysis, the long-term trend and cyclical fluctuation curve of the stock prices of listed companies in the real estate industry are steep, indicating that China's real estate industry's real estate industry market fluctuates greatly. (2) When making a model prediction, the average daily price of each stock obtained after the Tobit test is the same as that of the OLS prediction, indicating that the core model also has good empirical robustness. (3) During the heterogeneity analysis of stock price, it is found that the regression model fits the residential development industry better than other industries.

Productivity assessment of the real estate industry in China: a DEA-Malmquist index

PurposeThe high-quality development of the real estate industry is crucial to the transformation of China's economy. However, few studies apply the productivity to explore the development path of the real estate industry in China. To fill this gap, this study mainly investigates the total factor productivity (TFP) of the real estate industry of 30 sample provinces in mainland China from 2007 to 2016.Design/methodology/approachThe Malmquist index is applied to estimate the productivity (i.e. TFP) of the real estate industry, based on the data envelopment analysis (DEA). Then, the truncated tobit regression analysis explores the external influencing factors on the TFP of the real estate industry.FindingsThrough empirical analysis, it is found that the high-quality development of the real estate industry depends on the technological innovation by the real estate enterprises and the targeted policies by the provincial government. Moreover, the development of the real estate industry has a positive correlation with the growth of China's economy but a negative correlation with the development of other industries.Practical implicationsTFP mainly reveals the development status of the provincial real estate industry and identifies the driving force for exploring the high-quality development mode of the real estate sector. Furthermore, the fluctuation rule of TFP can be applied to predict the development trend of the real estate industry in the future.Originality/valueAs an application, this study measures the TFP of the Chinese real estate industry in different provinces and periods. The results have meaningful policy implications for policymakers regulating the real estate industry.

The Risk Spillover Effects of the Real Estate Industry on the Financial Industry: A GARCH-Time-Varying-Copula-CoVaR Approach on China

This paper analyzes the multiple transmission mechanisms of the real estate industry’s risk spillovers to the financial industry. A GARCH-time-varying-copula-CoVaR model is used to measure the spillover effects and dynamic evolution trends of risk in the Chinese real estate industry. The results show that (1) in recent years, the risk spillovers from the real estate industry to the whole financial industry in China has been relatively high, and the possibility of systemic risks has increased. (2) The channel of the risk spillovers of the real estate industry into the financial industry has shifted from being concentrated within a traditional single banking industry to the accumulation and superposition of risk across the banking, securities, trust industries. (3) Current regulations have not fundamentally mitigated the risk spillovers. As such, this paper proposes three suggestions on financial policies and regulations: firstly, the government should reasonably regulate cooperation between the real estate industry and the financial industry, curb excessive speculation and abnormal fluctuations in real estate prices. Secondly, the government should maintain the continuity of regulatory policies, formulate differentiated policies according to the essential attributes of given industries, and eliminate risk contagion among the real estate industry and financial industries. Thirdly, the government should improve the macro prudential management framework.

Organizational Entrainment of Project Launch: Empirical Evidence from Chinese Real Estate Industry

As entrainment theory often indicates, launching new projects at appropriate timing is critical for organizations to succeed in market competition. Despite this widely recognized concept by case studies in the organizational context, there lacks empirical evidence to support how this entrainment process is formulated by internal or external organizational activities. In the present study, we reveal the entrainment process that how organizational attributes and environmental favorableness influence projects’ launch pace or timing decisions. We empirically examine such propositions through survival analysis with 90,755 observations of residential development projects of 149 real estate firms in China. Specifically, we find that organization inertia and resource munificence will decelerate and accelerate the timing of project launch, while external environmental favorableness can both directly accelerate the timing of project launch and strengthen the main effects of organization inertia and resource munificence on the timing of project launch.

Structural evolution of real estate industry in China: 2002-2017

This paper proposes an innovative framework that identifies the structural characteristics and the evolution process of real estate industry in China from 2002 to 2017 through a series of modified network analysis methods. Our results suggest that the growth momentum of real estate industry can be extended to a wide range of industries especially the financial industry while the systematic risk of the industry is becoming evident. Therefore, macro-prudential policies tailored to local conditions should continue to be the first line of defense. In addition, guiding policies towards professional service for developers are supposed to be emphasized since Chinese real estate industry is within the transition from construction-oriented towards service-oriented. Moreover, to satisfy the demand of citizens for improved housing and promote the upgrading of housing consumption is also critical because the role as supplier of housing in macroeconomy is becoming increasingly important according to our calculation.

Impact of environmental information disclosure and real estate segments on cost of debt: Evidence from the Chinese real estate industry

AbstractThe novel part of this paper is to examine the individual and joint effects of the real estate segments (RETs) and environmental information disclosure (EID) on the cost of debt (COD) in the real estate industry in China. Building on extant literature, using 1,250 firm‐year observations from 2006 to 2016 and applying both Feasible General Least Squares and Two‐stage Least Squares Instrumental Variable approaches, we provide evidence that the commercial RET leads to an increase in the COD, while EID leads to a decrease in the COD. The joint effects of the RETs and EID on the COD indicate a significantly positive relationship with the COD. This signifies that even with the increased levels of EID in commercial real estate sectors, its COD is higher than for residential real estate sectors. These findings have important policy implications for environmental risk assessments for real estate sectors, their lending institutions and wider stakeholder groups.

Measuring destocking performance of the Chinese real estate industry: A DEA-Malmquist approach

This paper aims to measure the evolution of destocking performance of the Chinese Real Estate Industry based on a DEA (Data Envelopment Analysis)-Malmquist approach, which is seldom used in this industry in existing literature. In 2016, the Chinese government introduced a unified national destocking policy to reduce real estate inventory to save the downturn in the real estate market, but the effect was less than expected and led to soaring house prices in first-tier cities. By analysing the destocking performance over the period from 2005 to 2015, we find the following: (1) It is impossible to use a unified policy to effectively address the national destocking issue because of the difference of DMUs' destocking efficiency, input redundancy and total factor productivity score changes. (2) With the current destocking performance and investment status, the government is still ignoring the existing commercial real estate problems. (3) The redundancy of firm assets and staff indicates that zombie firms may exist and risk future unemployment in the real estate industry. (4) Despite the recently repeated government interventions in this industry, destocking performance remains falling since 2008, and problems in other regions is more severe than in central cities. (5) The financial crisis triggered by the US subprime mortgage crisis has had a great impact on China's real estate industry. The destocking performance dropped sharply in 2008, forcing the Chinese government to introduce policies to stimulate the real estate market. Policy recommendations are also put forward based on the findings.

STRATEGIC BUSINESS MODEL TYPOLOGIES EVIDENT IN THE CHINESE REAL-ESTATE INDUSTRY

The Chinese real estate industry has emerged over recent decades as one of the key drivers of Chinese economic growth and attracted thousands of players nationwide. Yet, despite the continuing importance of the real-estate industry in China, there has not been any work done to identify nor describe the strategic business models used by enterprises within the sector. This study fills this gap in the literature. This paper begins by building a framework for studying the strategic business models used within the Chinese real-estate industry, and then goes on to identify the generic models that exist in the industry. A two-step cluster analysis of 117 Chinese real-estate companies was carried out over seven parameters identified in the literature as impacting business models: 1) clients, 2) products offered, 3) market locale, 4) financial structure, 5) value chain embeddedness, 6) core competency, and, 7) revenue source. Five generic strategic business models that characterize the Chinese real-estate industry were identified: 1) commercial property model, 2) government servicing model, 3) cost efficiency model, 4) asset management model, and, 5) high-turnover model. The findings will assist industry practitioners in evaluating and informing their own competitive positions within the Chinese real-estate industry.

Analysis of the Situation of Real Estate Industry in China and the United States Based on Behavioral Economics

In recent a few years, the rapid development of Chinese real estate industry brought a wave of unprecedented prosperity to the Chinese economy, making it jump fast to the second highest in the world in a short time. In our opinion, although this economic cycle seems to be a Kuznets cycle, it is still different from the classical theory put forward by Simon Kuznets when we use the theory of behavioral economics to analyze. The purpose of this article is to analyze the causes and effects of this economic peak from the perspective of macroeconomic management by using the theory and method of behavioral economics.1