Housing boom, real estate diversification, and capital structure: Evidence from China
Jialin Huang and
Zhao Rong ()
Emerging Markets Review, 2017, vol. 32, issue C, 74-95
By exploiting the unique situation in China that numbers of listed firms diversified into the real estate industry during the recent housing boom period, we find that firms' real estate diversification positively influences their subsequent leverage ratios. Further investigations suggest that such an increase in leverage mainly comes from short-term debt instead of long-term debt. We also find that housing price growth and state ownership are underlying mechanisms through which real estate diversification stimulates leverage. Last, we find that firms with real estate diversification enjoy less financing cost deterioration and less market value deterioration when they raise more debt.
Keywords: Real estate; Industrial diversification; Capital structure; China; Housing boom (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:32:y:2017:i:c:p:74-95
Access Statistics for this article
Emerging Markets Review is currently edited by Jonathan A. Batten
More articles in Emerging Markets Review from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().