The Study Of Listed Companies’Risk-return Relationship In China

With the global increasing trend of economic intergration, our country’s en terprises’external operating environment become more complicated and the unc ertainty of enterprises’ internal factors are also increasing. Enterprise with its in ternal and external uncertainty factors is vulnerable to multiple risks in the pro cess of strategy implementation and is unable to achieve its strategic goals. W hat’s more, it even can lead to the failure of implementation of strategic mana gement which makes the enterprise suffer extinction. Global consulting firm De loitte conducted a research in1999year and found that one of the enterprise’s biggest risks is strategic risk. So strategic risk namely enterprise’s risk gets attention day by day. Especially,the strategic risk-return relationship become t he focus of research. For a long time, traditional financial theory considers that the strategic risk-eturn relationship is positive, what’s so-called "high risk, h igh income". Until Bowman (1980) study which found "Bowman’s paradox" ph enomenon, people have begun to query the traditional assumption of positive ri sk-return correlation and then conducted a lot of further study. Based on thi s, this paper takes the risk-return relationship of listed companies in our countr y as the research sample, conducts a research on multiple industries’risk-return relationship and the determinants of enterprise’s risk.First of all, based on the review and summary of previous research, this s tudy establishes a risk model according to the Behavioral Theory of Firm and selects twelve industries and629listed companies in our country as the resear ch sample. As a key variable in the risk model, the measurement of risk adopt ss the advanced ex-ante measurement method.Secondly, this research uses SPSS17.0software to carry on the descriptive statistical analysis and multiple regression analysis of the risk model, several i mportant conclusions are drawn as followings:A. Enterprise’s risk-return relatio nship is closely related to the nature of the industry. In the industries with hig h degree of free competition (e.g. this research’s industries in left column), ent erprise’s performance has a negative impact on enterprise’s future risk. That is to say, the "bowman paradox" phenomenon exists in the industries, namely th e negative risk-return correlation. On the contrary, in the industries with hig h degree of monopoly (e.g. this research’s industries in right column), enterpris e’s performance has a positive impact on enterprise’s future risk. That is to sa y, the risk-return correlation is positive. B. Each variable in the risk model has a positive or negative impact on enterprise risk and the same variable in d ifferent industries has different impacts on the risk. For example, in the industr ies with high degree of free competition, enterprise’s performance has a signifi cant negative impact on enterprise’s future risk. On the contrary, in the industr ies with high degree of monopoly, enterprise’s performance has a significant p ositive impact on enterprise’s future risk. C. Some industry exists the "bowman paradox" phenomenon, but western theory explanations about the "bowman p aradox" phenomenon is not fully applicable to China, so the further explanatio n needs to be combined with China’s specific national conditions and developm ent status of industry.Finally, this research gives relevant inspiration according to the research c onclusions and provides the enterprises, government and other investors with su ggestions. At the same time, on the basis of studying the limitations, this resea rch points out the further research direction.