Empirical Research On The Impact Of EVA Performance Evaluation On The Listed Power Generation Companies' Inefficient Investment

Corporate investment behavior is not only the ability to determine its own value creation, but also an important role for economic development in China. In recent years, many enterprises due to blind investment in China, then the losses phenomena have occurred, while the inefficient investment widespread. In China, the State-owned Key Enterprises are mostly in important industries beneficial to the people's livelihood, but poor management, capital inefficiency, irrational allocation of resources and a series of internal problems exist in some enterprises. In order to enhance the State-owned Key Enterprises'management, improve capital efficiency, at the end of 2009, the SASAC revised the "Provisional Measures of the Heads of State-owned Key Enterprises operating performance evaluation"secondly and in January 2010 from the 1st started to implement economic value added (EVA) in the State-owned Key Enterprises assessment. And as an important part of the power generation industry, most of the power generation listed companies are held by State-owned Key Enterprises, so it has important signifinance to promote its capital investment efficiency.In this paper, researches on corporate inefficient investment behavior, mostly focused on over-investment behavior, few research attention to corporate under-investment behavior; and on the consequences of implementation of EVA performance evaluation, the findings in domestic and foreign do not form a consistent point of view, and the research is primarily aimed at all State-owned Key Enterprises, there is little research analyzed in different industry sectors. Based on this, this article used empirical analysis ways, testing the effects of EVA performance evaluation on China's power generation listed company's inefficient investment behavior. This paper first analyzes the overall investment levels characteristics and investment structural characteristics of power generation listed companies, and analyzes the influencing factors of inefficient investment from the aspects:principal-agent conflict, free cash flow, liabilities level and so on, then explains the relevance of EVA performance evaluation and China's power generation listed company's inefficient investment behavior; Secondly, drawing on the classic inefficient investment model by Richardson (2006), the paper inspects inefficient investment level of China's power generation listed companies, choosing the relevant data of the 34 listed companies which are "continuing operations" and "power business-oriented" in 2006-2014, and then doing descriptive statistical analysis, correlation analysis and regression analysis of the whole sample, if the residual value is positive, it means that over-investment, if the residual value is negative it means under-investment, so the sample data are divided into two groups:over-investment group and under-investment group; Subsequently, with the two samples data of over-investment group and under-investment group as explanatory variables, building the model that the effect of EVA performance evaluation on corporate inefficient investment behavior in China's power generation listed companies, empirical research shows that, EVA performance evaluation has a significant inhibitory effect on China's power generation over-investment behavior, but the effect on underinvestment behavior is not obvious.