Dynamic Efficiency Research On Investment Of Zhejiang Company Based On Linear Programming

With the development of China's capital market, the number of listed companies becomes more and more. And the performance of listed company gets the concerning of all parties. As one of the most important decision, the decision of investment acts as a decisive role on the performance of company. Dynamic efficiency of investment is an important reference for investment decisions, therefore, academic starts to research on the issue that how to measure the dynamic efficiency of business. The research on dynamic efficiency started earlier overseas. And since china lags behind on this hand, it has not formed a scientific method to measure the dynamic efficiency of investment so far .So, we present a measurement method of dynamic efficiency of investment based on linear programming and we also apply it to the companies.The innovations of this paper are on the two hands. First, we did not use the traditional methods on investment efficiency such as the methods based on the neo-classical investment,free cash flow and so on. But measuring the dynamic efficiency on investment of companies by learning from the existing DEA model and introducing dynamic process through linear programming techniques; Second, in order to facilitate subsequent data processing, we group the sample data on the basis of ROA. Inadequacies of this article also exist. First, the selection of sample data is not perfect. The selected financial data of listed companies is from 2003-2010; it may cause the inaccuracy to the empirical results due to domestic implementation of the new accounting standards, which may bring inconsistency of financial statement data disclosure. Second, the model defects too. The model assumes a perfect forecast of future variables, which is not realistic. Moreover, there are many factors influencing the measurement on dynamic efficiency of company's investment, the model can not put all factors into account. So the results can not be the most accurate depending on disclosure of financial data only.