An Empirical Research On The Relationship Between Working Capital Management And Value Of Chinese Listed Companies

The creation and realization of firm′s value is from a series of economic activities,such as design, purchase, production, sale, as well as product development and so on, andthe capital flow runs through the entire value chain. So strengthen working capitalmanagement is important to the promotion of firm′s value. However, in the research of thefirm′s value, the theory and practice fields have focused on the long-term financial decisionfor a long time, while the working capital management didn′t cause much attention. Theexisted working capital management depends on experience, or just limits to researchingsome single part of the working capital, and lack of a systematic research.Firstly, the paper has reviewed the research status at home and abroad. Secondly, thepaper has made a brief introduction of the basic theories about working capital management,firm’s value, as well as the relationship between firm′s value firm′s value, value chain andworking capital management. Thirdly, conducted an empirical research using panel data, theresearch sample is the annual financial data for the period of year2006~2010, which isselected from the1013companies in China′s A shares market that listed in Shenzhen andShanghai Stock Exchange. In the empirical research, the paper firstly made a descriptivestatistics of the total sample and each industry, then selected five typical industries assamples to carry out empirical research, and built regression models to analysis the workingcapital management efficiency′s influence on firm′s value, as well as working capitalmanagement policies′influence on firm′s value. At last, based on the view of value chain,the paper proposed the corresponding measures on how to strengthen the working capitalmanagement of the enterprises.