Nonlinear Transmission of Debt Financing Risk to the Financial Performance of Housing Enterprises in China: The Moderating and Threshold Effects of the Household Leverage Ratio
Keywords:
Financial performance, household leverage ratio, Nonlinear threshold effect, Debt financing riskAbstract
In the context of escalating debt pressure and heightened volatility in China’s real estate market, the nonlinear transmission mechanism through which Debt Financing Risk affects the Financial Performance of Housing Enterprises remains insufficiently understood. Using panel data of 27 listed Chinese real estate firms from 2008 to 2024, this study constructs composite indices for Debt Financing Risk and Financial Performance and employs a two-way fixed effects model, panel threshold model to identify threshold effects and address potential endogeneity.The results reveal a significant inverted U-shaped relationship between Debt Financing Risk and Financial Performance, with a critical threshold of 69%. Below this level, moderate risk exposure enhances performance; beyond it, risk exerts a pronounced suppressing effect. Moreover, the Household Leverage Ratio exhibits both continuous and interval-based moderating effects. When household leverage remains below 77%, it reinforces the positive performance effect of debt risk; however, once it exceeds this threshold, it significantly amplifies the negative impact.
These findings highlight the existence of an optimal risk interval and underscore the macro–micro transmission role of credit structures in shaping nonlinear financing effects.
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