An Empirical Study Of The Effect Of The Corporate Investment On The Enterprise Value

Corporate investment can create and accumulate wealth, can meet the sustainable development of an enterprise, and it is the source of enterprise value. Generally, corporate investment is an inevitable choice for an enterprise, and it is an important driving force to investment by getting a reasonable financial return and enhancing the enterprise value.In recent years, with the vigorous development of China's economy, Investment is one of the "Troikas" in economic growth, which has played a crucial role in the promotion of China's rapid economic growth. Especially, China's real estate investment has increased year by year. Investment's contribution to GDP growth is rising, the rapid development of industry increases the investment in real estate enterprises. However, what would be the impact of business with the rapid growth of investment in real estate enterprises? Whether the increasing in the scale of investment can enhance enterprise value? Centering on the above questions, I have China's A share real estate listed companies as an example, study the effect of the corporate investment on the enterprise value.This paper contains the basis of theory, the status quo analysis, descriptive statistics and empirical analysis. I analyze the theories of the corporate investment and the enterprise value, and then analyze China's macro-environment of real estate investment, the status quo of the development of industry and the status quo of the corporate investment. On this basis, I have adopted the Causal lag model to study the Effect of the Corporate Investment on the Enterprise Value in Real estate listed companies. This paper includes four sections.The first chapter deliberately explains the research background, theoretical and practical signicicance, research methods, framework, Literature Review and the major points of originality. This chapter makes the reader grasp what the paper discussed rapidly. And I presented a systematic reorganization of the existing related research points, described the status quo of research on the corporate investment and the enterprise value. According to the main idea, I divide them into two parts, domestic study and overseas study. The overseas study based on the relatively perfect capital market, and produced many research results on the relationship between the corporate investment and the enterprise value, and the research results were related to information asymmetry, adverse selection, agency theory, and so on. But the domestic study is later, and the number of research results is less. By analyzing the literature review, this paper has made the theoretical groundwork for later analysis and study.The second chapter contains the literature review of the related theory on corporate investment and enterprise value. In this chapter, I studied the concept and theory of investment, established the concept of the investment and the scope of the investment. I studied the related theories and assessment methods of the enterprise value. established the concept of the enterprise value and the assessment method of the enterprise value. According to the literature review, I have explained the relation between corporate investment and enterprise value from the theory part and the practice part, have built the theoretical models about the relations between corporate investment and enterprise value. What's more, this paper makes a brief comment on the existing study, points to two problems in existing research, and thus leaded to the perspective of this paper, indicates the difference between my study and theirs highlights this paper's academic and practical value.The third chapter contains the macro investment environment of China's real estate enterprises, the status quo of the industry investment, the status quo of the industry investment, the status quo of micro investment. Through descriptive statistics, comparative analysis, because of the impact of the macroeconomic environment for investment, China's real estate investment will continue to increase in a long time, and real estate enterprises shows regional and concentration.The fourth chapter contains the sample choice method, data source, indexes' definition and measurement. According to the current situation of investment in the real estate companies, this paper grasped the meanings on corporate investment and enterprise value, established evaluation index, built a causal lag model, tested the index by ADF test and regression analysis. Through empirical research, we find that it is not obvious for the correlation between corporate investment and Tobin's Q value, and it is obvious for the correlation between earnings per share, return on equity investment and corporate investment. Generally, the Tobin Q value of real estate listed companies is more than 1.And according to the regression results, the corporate investment has a positive correlation with the earnings per share in a lag, and the corporate investment has a positive correlation with return on equity investment in a lag. But the investment in 2005 has a negative correlation with return on equity investment in 2007. The reason may be related to China's real estate investment system and certain volatility about real estate investment in different years.