Inventory Investment, Financial Leverage and Firm Performance: Evidence from Chinese Listed Companies of Real Estate

Abstract

According to the descriptive statistical analysis and empirically test based on samples of 2007-2015 Chinese listed companies of real estate, I find that the inventory accounted for more than half of the total amount of assets and increased heavily; the inventory investment turnover is slow, the asset-liability ratio is higher; ZZR, ZFZ and YXFZ have a significantly negative effect on ROA; SYXY and YHXY have a significantly positive effect on ROA; CTC, ZFZ, YXFZ, SYXY and YHXY have a significantly negative effect on TBQ; ZZR has a significantly positive effect on TBQ. These findings show that the "destocking" and "deleveraging" will help to improve the financial performance and market performance of Chinese listed companies of real estate.