Working Paper Article Version 2 This version is not peer-reviewed

Do Largest Shareholders Affect Financial Sustainability Under Holdings Heterogeneity? -Regulation/Intermediary Role of Financial Constraints in Coastal Real Estate

Version 1 : Received: 7 October 2020 / Approved: 8 October 2020 / Online: 8 October 2020 (16:05:14 CEST)
Version 2 : Received: 16 October 2020 / Approved: 19 October 2020 / Online: 19 October 2020 (14:32:53 CEST)

How to cite: Zhang, L.; Yu, W.; Xia, X. Do Largest Shareholders Affect Financial Sustainability Under Holdings Heterogeneity? -Regulation/Intermediary Role of Financial Constraints in Coastal Real Estate. Preprints 2020, 2020100182 Zhang, L.; Yu, W.; Xia, X. Do Largest Shareholders Affect Financial Sustainability Under Holdings Heterogeneity? -Regulation/Intermediary Role of Financial Constraints in Coastal Real Estate. Preprints 2020, 2020100182

Abstract

Real estate industry is related to the national economy and people's livelihood,characterized by a high degree of financial intensity. The enterprises in this industry need certain financial ability and large shareholder controlling ability to support their survival. However,due to the multiple adverse impacts of current state policies,banks and private capital,the credit crunch,the sudden decrease in withdrawn funds and the limitation of internal financing,the problem of capital restraint of real estate enterprises has become more and more serious. From the perspective of corporate governance,this paper studies the interaction among financial constraints,ownership concentration and corporate performance under different shareholding states by analyzing the quantitative characteristics of equity structure,and looks for the appropriate range of the largest shareholder holding ratio,which has considered the financial performance and risk. It is found that raising the ownership concentration can effectively ease the financing constraints and improve the performance of enterprises,both of which are significant under the state of high ownership concentration, while the financial constraints play a significant intermediary effect under the State of absolute holding, while in the decentralized state of ownership,there is a significant regulatory effect,and the interaction of the three will be different due to the size of the enterprise.

Subject Areas

Financial Constraints; Agency Cost; Equity Concentration; Holding Heterogeneity; Real Estate Industry

Comments (1)

Comment 1
Received: 19 October 2020
Commenter: Lipai Zhang
Commenter's Conflict of Interests: Author
Comment: We modified the grammar and linguisitic mistakes. The theory and introduction have been improved.
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