Research On The Stakeholders’ Performance Evaluation Based On The Joint Investment

Recently, Chinese venture capital has developed rapidly, as an important part of theventure capital, the joint investment has been paid more attention. Besides, the study on thejoint investment performance is of enormous significance. The joint investment is the result ofthe stakeholders’ collective choice, include the investment institutions, the original corporateshareholders, managers and creditors, while they are gaming and choosing in the process ofpursuing maximizing their value. In other words, in the joint investment process, thestakeholders’ performance is different and all is worth study. In this paper, combining theorywith case, from the perspective of stakeholders collective choice, the performance evaluationsystem on stakeholders’performance in the joint investment is established.The research idea is: firstly, the thesis begins with analyzing the forming logical processof joint investment companies with the collective choice theory of stakeholders and exploringall stakeholders’ goals in the joint investment enterprises; Then, according to the goals ofstakeholders, choose their corresponding target indicators; Again, determine the index weightsof stakeholders with the variance coefficient method and seeking various stakeholders’comprehensive performance index with comprehensive index method; Finally, theperformance evaluation system is applied in the joint-invested enterprises "Suntech" andcompute Suntech stakeholders (institutional investors, the original shareholders, managersand creditors) performance index value. Through analyzing the performance of allstakeholders in the joint investment enterprises "Suntech", the conclusions are as follows:Firstly, the joint investment has adversely affect to the original shareholders of "Suntech",mainly in decreasing the proportion of large shareholders and corporate ROE. The proportionof large shareholders of Suntech in2005was54.14%, compared to the previous shares(70.93%) decreased16.79%.The return on equity (ROE) is116%in2004down to14.23%in2005. The reason of venture investment performance of the original shareholders decliningare that investment institutions have priority to allocate dividends and dilute the corporate shares of original shareholders.Secondly, investment institutions in the joint investment have higher investment income.Mainly reflected in: Goldman Sachs and other investment institutions in the joint investmentof Suntech have a higher multiple of9.2times in2005,14.6times in2006. Millionselectricity corporate is in multiples of17.5times in its first day of trading, by the end of2005up to a multiple of18.3times. The reasons of the investment institutions have higherinvestment income are as follows: The photovoltaic industry has a good developmentprospects; The Government gives strong support and the market recognition is high; Suntechhas abundant capitalized technology, higher market share and are in the rapid growth stage.Thirdly, the joint investment has a favorable impact on the investment performance ofcreditors. Mainly because the company raises a lot of money through IPO, which hasimproved the current ratio and the quick ratio improved the company’s short-term liquidityand long-term solvency. In the joint investment process of "Suntech", the joint investmentperformance index value of creditors increased above the industry averageFourthly, the joint investment has beneficial effect to managers’ investment performance.In the joint investment process, Suntech manager performance index value is much higherthan the industry average. When the executive Stock expired in2010, the equity value is$61,560,250and value-added rate is15.85%.The implications are that: the internal stakeholders-shareholders and venture capitalinstitutions, need to pay attention to judge if the company is suitable to choose the jointinvestment, if the corporate value can be increased through joint investments. Then theinternal stakeholders’ interest can be increased. Only the corporate which is in the rapidgrowth phase and in an emerging high-tech industry, having an abundant technical capital andbroad market prospects, the shareholders and investment institutions can choose the jointinvestment as their investment and financing means to increase their own capital value.The external stakeholders-the creditors increase their capital value though the right tolearn the companies’investment and financing conditions and limited right to their investmentand financing activities. Managers has impact on corporate investment and financingactivities according to their expertise and management experience. In other words, creditors and managers have an indirect effect on corporate investment activity. Thus, they haveindirectly influenced the joint investment. Therefore, they should effectively use theirinfluence to increase their value and satisfy their own interest.