| The efficiency of capital determines the future growth of China' s economy. Whether capital market can allot capital efficiently or not determines the rate and quality of economic growth. This essay studies the efficiency of capital market, with focus on the agricultural listed companies, then analyzes the institutional flaws, summarizes the development rules of capital market, and provides suggestions for the healthy development of capital market.This essay first studies the capital efficiency of agricultural listed companies. Through the analysis of 13 year' s data since 1993, we can see clearly that the capital efficiency of agricultural listed companies has been declining, with net rate of asset yield and gross rate of asset yield declining from 5.19 percent and 10.24 percent to 2.53 percent and 1. 18 percent respectively. If we take capital cost in consideration and analyze with economic value added (EVA, for short), the result will be more surprising: the EVA of agricultural listed companies has been a negative number. From 1993 to 2002, stockholders of agricultural open companies suffered loss of 43.14 yuan per hundred capital. Though the average net profit of agricultural listed companies has been above zero and seems to improve welfare, they actually diminished welfare, if capital cost were taken into consideration.Then we widen our research angle to all listed companies, and compare the capital efficiency of China' s listed companies with compartment of main foreign countries. We can come to the following conclusions: EVA basically is negative number, not only for China' s agricultural open companies but also for all open companies. From 1994 to 2001, EVA is above zero only in 1999 and 2000. That is to say, on average, China' s open companies didn' t attain return to make up for stockholders' capital cost and they didn' t make profits for stockholders. In 2001, the net rate asset yield of all the A-stock companies reached 5. 5 percent, while 18. 2, 14. 6, 13. 9 and 1. 5 percent in America, England, Europe and Japan. From the comparison, we can see that the capital efficiency of China' s companies is far lower than that of developed countries (while higher than that of Japan).Why the capital efficiency of China' s open companies is so bad? This essay analyzes it in two aspects: one is the operating efficiency, and the other is institutional problems of capital market.Chapter 3 and 4 analyze the operation efficiency of China' s capital market. Just like real economy, capital market allots resource by price mechanism. In 1965, American financial expert Eugene Fama presented Efficient Market Hypothesis. Western scholars divide capital market into three layers according to the gap between real market and ideal efficientmarket: weak efficient market, half-strong efficient market and strong efficient market. Weak efficient market is the lowest layer of efficient market. Employing The Random Walk Model, The White-noise Models and Nonlinear Models to test the weak efficient market of China' s capital market, this essay find that China' s capital market hasn' t reached the lowest efficient market. That is to say, the price of China' s capital market is twisted and it is an important element influencing the capital efficiency of China' s open companies.Stock puff is the most obvious feature in China' s capital market and stock puff reduces the efficiency of stock market too.Chapter 5 mainly discusses the institutional causes which influence the capital efficiency of open companies.Among the institutional causes which influence the capital efficiency of open companies, the key is structure of corporation governance. Corporation governance not only influences capital efficiency of single company but also impacts the stability of financial system and the quality of economic growth, consequently influences the macro capital efficiency of the whole society. That the proportion of state-owned share is too high is the most important problem of corporation governance structure. So many domestic...
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