Vertical Scale, And Stock Appreciation Rate Of U.s. Listed Companies Correlation

The debate of the relationship between firm size and economic efficiency lasts a long time. The debate on this issue is caused by the unclear scale of business concept. Zhang Yuanzhi Consider that Firm size should be classified into horizontal and vertical scale. Horizontal scale that brings scale economy is obvious. To be reversed, with the changing external industrial environment, the greater the vertical scale, the worse the economic efficiency may be.So the vertical scale and economic efficiency may have a negative correlation, reflected in the stock, that the vertical scale and stock appreciation rate may have a negative correlation too.This paper attempts an empirical test to validate the conjecture before. this paper selects 69 companies of New York Stock Exchange's technology segment and material segment. In this paper, vertical scale is measured by Herfindahl, and enterprise business performance is measured by stock appreciation rate. Using SPSS statistical software, we test the rate of change of the Herfindahl and stock appreciation rate's correlation, and find that there is a negative correlation between the rate of change of the Herfindahl and stock appreciation rate. In other words, the rate of change of the Herfindahl and vertical correlation scale has a negative correlation. In addition, the vertical scale of this enterprise economic reasons, this paper try to give a theoretical explanation of this conjecture from agency theory, the internal capital market and deep motivation of management's vertical scale expansion. Finally, based on the theoretical that be proved, this paper try to give the corresponding recommendations of enterprise cost management, strategic management for enterprises to improve economic efficiency.