The Effect Of Working Capital And Corporate Comprehensive Governance On The Company's Value

As one of the core mechanisms of governance,the board of directors governance system construction and the working capital of enterprises have become the focus of corporate governance in recent years.The board of directors is the organization of the enterprise which is responsible for decision making,so the board of directors plays an important role in the value of the company.In this dissertation,we extend Faulkender and Wang(2006)model by introducing a variable of the level of the corporate comprehensive governance and discuss the effect of the variable and the working capital on the company's value.In this dissertation,we investigate the relationship between working capital,corporate governance and firm value through the investigation of 1250 listed companies in the A share market from 2008 to 2015.The meeting of the board of directors is added as an original variable in the framework of corporate governance and we build a measure of the company comprehensive management level variable G.Then we find that the effect is considerable.Specifically,the marginal value of investment in working capital is less than that of investment in cash.In the balance,the value of margin working capital is affected by the he current working capital,leverage ratio and the level of comprehensive management.At the current level of working capital,an increase of working capital will reduce excess return and investment value as well.For the marginal value of working capital,commercial companies,higher efficiency of corporate governance companies,constrained companies enjoy more value of margin working capital investment which contributes more to the value of company.