Research On Enterprise Scale Of Chinese Listed Companies

The enterprise scale is the important organization basis of national economy. Whether it is reasonable or not, it will be directly related to the rationalization of industrial structure and the efficiency of capital stock scheme, ulteriorly it will influence the level and quality of economy growth. In this study, Annual Reports (2000, 2002, 2003, and 2004) of 974 Chinese listed companies are collected; all these companies are in Shanghai and Shenzhen. Also many different analytical methods are used to carry on empirical research on the enterprise scale of these companies.A group of indices is presented in this study. It comprehensively evaluates the enterprise scale through its power, economy and rationality. And factor analysis is selected to rank the sample companies. On the basis of the indices system above, production function models, transaction costs theory and discriminant analysis are used to carry on empirical research on the sample companies in the contest of industry and region. C-D production function is chosen to form the production function model in this study. And the input is made up of total asset, fixed asset, staff population, total cost and overhead expense; furthermore, revenue is the output. Although enterprise boundary can be well explained by the transaction cost theory, it is gainless when measuring the transaction cost and then being used in the quantification research. Based on the transaction cost theory, it takes rational transformation of the transaction cost to carry on the quantification research. Discriminant analysis also is an effective and commonly used method when studying the enterprise scale. On the basis of the indices system, discriminant analysis is also used to carry on empirical research in this study. The results from all these 3 methods have a high consistency. The findings show that: (1) companies of transport, metallurgical and petrochemical industry have more appropriate enterprise scale; (2) companies in Jiangsu, Liaoning and Shandong province have more appropriate enterprise scale. And the results from these 3 methods all show that the Chinese listed company is small-scale company. So the majority of Chinese listed companies can have better returns through expanding its enterprise scale.