The Impact Research Of Private Equity Investment Characteristics On The Invested Firm Value

Private Equity, or PE for short, originated in America in the 1940 s, and sprung up in the 1970 s. It grew rapidly and has popularized all over the world, and after the bank loan and IPO, PE has become the third important financing way in China. As the main investment strategy of which is long investment, PE can help enterprises effectively alleviate the financing difficulties, encourage the management focus on long-term value creation, effectively improve enterprise the level of corporate governance and technological innovation, enhance the core competitiveness and the enterprise’s value.PE has received a lot of praise for the good performance in enterprise value promotion and investment returns. However, existing researches focus more on the direct influence on enterprise value by PE, few of them go deep into the influence based on different paths, not to mention combination with PE characteristics. Given this, based on the principal-agent theory and social network theory, this study focuses on the relation of PE characteristics and invested enterprise value. It constructed the theoretical analysis framework of influence on invested enterprise value by PE characteristics, and then revealed the mechanism of it. This study expands the research ideas for PE characteristics and enterprise value, and to provide the practical reference for government sectors, PE investment organizations and listed companies. Based on this study, mainly including:(1)Based on the principal-agency theory, social network theory, corporate governance theory and value creation, by literature study and normative study method,and the operation process of PE investment, this study explores the content and implementation of influence on invested enterprise value by PE investment characteristics, and then analyzes the influence path and mechanism of it. Synthesizes the critical paths of PE characteristics, enterprise value and corporate governance, this study constructs the theoretical analysis framework of influence on invested enterprise value by PE characteristics.(2)Based on the principal-agency theory and social network theory, this study constructs the empirical model of influence on invested enterprise value by PE characteristics. It analyses the mechanism of the influence by comparative analysis, putsforward the hypothesis and then test it with empirical model. From the model test results, the enterprises invested with PE investment are proved to have good performance which reveals the function of PE for enterprise value. By further inspection,PE investment characteristics are found to have ability to influence the invested enterprise value, the level of which is varies with different characteristics.(3)Respectively based on the path of corporation governance, technical innovation and earnings management, this study analyses the influence on invested enterprise value by PE characteristics, builds the empirical model of critical path and tests the influence.Based on the analysis, the level of corporate governance and technical innovation can be improved by PE investment, the earnings management ability can be constraint effectively, the earnings quality can be improved, also the influence is varies with different PE investment characteristics. By further inspection, the corporation governance, technical innovation and earnings management play partial mediating roles between PE investment characteristics and invested enterprise value.(4)Based on the influence on the invested enterprise value by PE investment characteristics under multiple paths, this study constructs the test model in multiple paths, uses AMOS to empirically inspect the simple mediating role and multiple mediating role between the influence. The result shows that the corporation governance,technical innovation and earnings management play partial mediating roles between PE investment characteristics and enterprise value relationship. By further inspection, PE investment characteristics influence on the invested enterprise value by conduction of the corporation governance, technical innovation and earnings management at the same time, the difference of influence on invested enterprise value by PE investment with different characteristics and paths is significant.Researches, by scholars home and abroad, about influence on invested enterprise value by PE, are mostly based on the cost theory only. From the perspective of PE investment characteristics, based on the principle-agent theory and social network theory, this study focuses on the influence on invested enterprise value by different PE investment characteristics. Combing with the corporate governance theory, value creation theory and information asymmetry theory, based respectively on the corporate governance, technical innovation, earnings management and multiple paths, it studies the influence on the enterprise value by PE investment characteristics. It has both thetheoretical meaning and practical value. In theory, this study provides a theoretical basis for the further research of PE investment and invested enterprise value. It helps to study further the mechanism of influence on invested enterprise value by PE investment characteristics. It also helps to enrich the corporate governance theory, the theoretical system of enterprise value creation, and the information asymmetry theory. In practice,this study helps enterprises use the PE investment to promote the enterprise value, thus better play the value creation effect of PE investment. It helps the PE investment organization run scientifically and self-improve, and better provide value-added services for the enterprise. It also helps government guide and supervise the PE investment, and achieve the optimal allocation of social resources.