Study on EVA Evaluation and Enterprise Over-Investment Behavior
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Xue Dong, Jipeng Qi
Enterprises investment behavior and efficiency has always been the focus of academic attention, which is closely related to the performance evaluation methods of corporate management, and good performance measures can influent and improve investment efficiency of enterprises. In recent years, investment brings tremendous pressure to the economic development. However, the data shows that the investment efficiency of China's central enterprises is low and does not match the level of investment. SASAC formally added EVA indicator which is the measure of value creation capacity of enterprises, as the head of the state-owned enterprises core indicators of performance appraisal in 2010. This paper collects data of listed companies of A-share central SOEs from 2008 to 2014, tests and counts the scale of over-investment according to Richardson investment model, examines the effectiveness of the EVA assessment system, and explores whether it meets the SASAC’s expectation of effectively investment, or what improvements it can make.
EVA, Economic Value Added, EVA evaluation, Over-investment.