Inventory Digestion Cycle, Product Market Competition and Corporate Value: Evidence Form Panel Data of Listed Real Companies in China

Jiajun ZHU, Tian ZHU, Min WANG

Abstract


This paper using China real estate listed companies from 2008 to 2015 as samples to analyze the relation among inventory digestion cycle, debt financing and product market competition and how these factors affect corporate value. The conclusions are as follows: (a) the inventory digestion cycle is significantly positively related to debt financing, and inventory digestion cycle takes on a inverted U-shaped relationship with product market competition based on debt financing; (b) high level or growth rate of inventory digestion cycle has an obvious inhibitory action on product market competition; (c) the higher the inventory digestion cycle, the smaller the corporate value, and the product market competition plays a partial intermediary effect between the inventory digestion cycle and the corporate value. The paper investigate the mechanism of inventory digestion cycle on the corporate value of static and dynamic perspectives, thus providing suggestive guidance for real estate companies to optimize resource allocation and improve management performance.


Keywords


Inventory digestion cycle; Debt financing; Product market competition; Listed real companies

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DOI: http://dx.doi.org/10.3968/9846

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