Appliance of DEA-CCR in Research on Sustainable Development of Real Estate Industry in China
China has issued several strict policies since 2008 to regulate and adjust the real estate industry, which would have substantial effect on the sustainable development of the industry. The effects seem have already showed by the great reduction of profit
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Appliance of DEA-CCR in Research on Sustainable Development of Real Estate Industry in China Da-lei Wang, Ben-zheng Xie, Yan-yan Wang, and Li Yang
Abstract China has issued several strict policies since 2008 to regulate and adjust the real estate industry, which would have substantial effect on the sustainable development of the industry. The effects seem have already showed by the great reduction of profit of leading companies and bankruptcy of small ones. So, study on the effect the strict regulating policies, from the prospect of sustainable development, has great meaning for government and its decision making. The previous theories mostly emphasized on the levels of several financial indexes in order to conclude the prospect of the industry, for example the profitability, liquidity and asset-liability ratio. But actuality shows even the company, with high profitability and low asset-liability ratio, would occur to bankrupt in the near future. Therefore, we must emphasize the operation efficiency of the industry or leading companies, which can conduct us to research the development of industry in near future. DEA has been successfully used for predicting one company’s bankruptcy. In this paper we would use the model for 20 leading real east companies whose operation would stand for the whole industry’s status mostly. The result shows there is great difference in the conclusion between DEA and the traditional manners. Keywords Real estate industry • Sustainable development • Efficiency analysis • DEA-CCR
Introduction The extensive development of real estate industry has great impact on the national economy structure in China. Under more and more strict policies of controlling this industry, it is no doubt that the scale of the industry and the manner of the industry
D.-l. Wang (*) • B.-z. Xie • Y.-y. Wang • L. Yang College of Management Science and Engineering, Shandong Jianzhu University, Jinan, China e-mail: [email protected] R. Dou (ed.), Proceedings of 2012 3rd International Asia Conference on Industrial Engineering and Management Innovation(IEMI2012), DOI 10.1007/978-3-642-33012-4_78, # Springer-Verlag Berlin Heidelberg 2013
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will be changed inevitably. The first series of such policies have been executed for nearly 5 years. Before we issuing the other series of controlling policies, it is very important to review that on what extent the status of the industry has changed, especially as related to its sustainable development. The previous research about sustainable development mostly focused on the expenditure of natural resources, the affection to environment and some single financial indexes (for example the level of profitability, ratio of asset liability). Indeed, these theories play an important role in their appliance to the other industries. But, it is inconsiderately to use them to the real estate industry regardless its own characteristics. First, development of real estate is a process with huge consuming of natural resources, whether it is healthy sustainable develo
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