The Industrialization Of Agriculture Investment Fund Research

Agricultural industrialization in china has a long way to go whencompared with developed countries, though it has made a great progress.For example, companies which sale incomes below 5 millions is 43%among 42 thousands leading companies of agricultural industrialization,which total sale incomes cannot be equal to the sum sale incomes ofPhilip-Morris and Nestle that are the two biggest farm produce companiesin the world. Our leading companies of agricultural industrialization, onthe whole, are at a disadvantage in size and competition and are limited indevelopment, which result in that the companies have little impact on thesociety and economy as a drive. The potential of agriculturalindustrialization operation hasn't be exploited for 70% of farmers are notinvolved in it. Capital scarcity, especially in middle and small leadingcompanies is one of the important reasons that cause leading companies'disadvantage in strength and competition. Though governments try tosupport it by policies, service, capitals and credits, the main bigcompanies are selected as emphases to be supported and the middle andsmall leading companies, even which are the potential innovationcompanies, cannot be covered because of financial capital restriction.Furthermore, the middle and small leading companies are more difficultto acquire capital in respect that banks have "rational discrimination"based on self behalf to them. Agricultural Industrialization Investment Fund (AIIF) studied in thedissertation is an investing and financing system to support leadingcompanies, especially the potential innovation middle and smallcompanies with capital. AIIF that is collected by issuing equity capitaland securities portfolio to investors directly invests in potential leadingcompanies and coaches it through capital operations and incrementservices to insure the assets' safety and increase. Thus, under the principle"share of adventures and share of profit", investors and agriculturalindustrialization achieve the win-win. Governments may invest littlecapital as start-up to attract more social capital to invest in leadingcompanies. In this meaning,AIIF is an innovative way different fromtraditional ways to assist leading companies. At the same time, AIIF alsois a system innovation to Industry Investment Fund (IIF) and agriculturalindustrialization operation. Because the studies in AIIF are little and notdeep and thorough, the dissertation to probe into the subject is valuablefor practices and theories. On the basis of former studies and supported by the theories ofeconomy, investment and finance etc, the dissertation try to discussdeeply and thoroughly on AIIF's meaning, formation, feasibility,operation mechanisms and governments' functions in AIIF. The mainpurpose is to form a foundation to further studies and to offer an idea toresolve financing difficulties of leading companies in China. The full text contains six chapters. The first chapter aims to probeinto the connotative meaning of AIIF in order to make a clear definitionof it, therefore, this chapter is divided into three parts: the concept of AIIFand its essential characteristics are introduced in the first part, on thisground, the concept of AIIF is well explained in another way through thedifferentiation between AIIF and other related concepts; the third partexpounds the great significance of AIIF development for our country. The second chapter studies how the AIIF generates on the theory ofInstitutional Economics. Through the research of the first chapter, wehave found that AIIF is a kind of innovation of investment Financing,which means that it is a new system arrangement that launched by someindividuals, teams or governments of foresight who could not acquirelatent profits under existing system. The theory of InstitutionalEconomics is applied in the research of AIIF generation mechanism, thenthe generation causes is discussed, finally, the two modes of AIIFgeneration are pointed out: induced and compulsive generation. AIIF isgenerated by the interaction of these two modes. The third...