WHAT INFLUENCE THE COMPANY’S ECONOMIC VALUE ADDED? EMPIRICAL EVIDENCE FROM CHINA'S SECURITIES MARKET

Abstract

This paper empirically examined what would influence economic value added of the companies listed in China’s securities market. The methods of Factor analysis and multivariable linear regression model were used here. It drew the conclusion that the company’s capital structure, profit ability, size, growth ability, management ability, and industry’s return on equity had positive influence on EVA, indicating that these factors had an active influence on EVA. The intangible asset had poor negative relationship with EVA. And the inventory management ability had no influence on EVA. The possible reasons were discussed later and, some advice was given at the end in order to increase the company’s economic value.
Key words: Economic value added, Influence factor, China