Appliance of DEA-CCR in research on sustainable development of Real Estate industry in China

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. © 2013 Springer-Verlag Berlin Heidelberg.