The Impact of Financialization on Profitability of Real Estate Enterprises

In recent years, the trend of financial and financial development in China has been increasing. The real estate industry, as an important industry of national economy, its financialization is becoming more and more obvious. In this paper, financial data of A-share real estate listed companies in Shanghai and Shenzhen from 2008 to 2017 were selected as samples, it aims to test the relationship between financialization of real estate enterprises and corporate profitability by using Bidirectional fixed effect model. The empirical results show that there is a significant negative correlation between the financialization of real estate enterprises and their profitability, that is, the financialization of real estate enterprises will inhibit their profitability. The research in this paper is not only beneficial to supplement and improve the micro-economic effect of the financialization of real estate enterprises, but also has a strong reference significance for the actual operation of real estate enterprises and government financial supervision. Keywords—Real estate enterprise; Financialization; Profitability; Bidirectional fixed effect model