Profitability and Marketability Analysis of Real Estate Listed Companies in China based on DEA Model

This paper measures the profitability and marketability performance of Real Estate Listed Companies with a two-stage production process data envelopment analysis (DEA) model. The two-stage production process defines that profit is generated on the first stage and market value is increased on the second stage. The impact of company size on profitability and marketability is revealed by evaluating CCR and BCC efficiency scores. From the research we can draw inefficiency companies exist on both two stages. Increasing returns to scale (IRS) occurs more often among relatively smaller companies in our data set and decreasing returns to scale (DRS) occurs more often among the larger companies on both two stages. However, relatively larger companies exhibit better performance on profitability, whereas smaller companies tend to perform better on marketability. The impacts of the company size on profitability and marketability are totally different; company size plays a positive role on profitability and a negative one on marketability. Furthermore, the very different performance in profitability and marketability of real estate listed companies reflects such a reality: relative to common shareholders, major shareholders can achieve their goal easier indeed. That reveals problems exit in the current China capital market system from another eyes.