Research On Financial Theory Based On Capital And Its Value Creation

The Static Equilibrium Pricing analyze framework of "Finance" has been concluded in the Corporate Finance mainstream, which has not fully revealed the substantive characteristics of Value-Based Management under the outward manifestation of cash circulations. As the development of financial theories both in domestic and overseas and the conversion of financial functions raised by Value-Based Management (VBM) in real business, the logicial framework of Corporate Finance mainstream has been suffering a breakthrough. But there is still lack of logicial analyses from the angle of dynamic value creation by now.This article is trying to reveal the mechanism of capital and financial behaviors aiming at value creation in roundabout productions, through excavating the essence of value management. In addition, it concretely analyses the practical forms of human capital, organizational capital, social capital and network capital when division and transaction. Thus it constructs an intrinsic logic of financial framework from the view on capital and its value creation, which is trying to reveal the essential characteristics of value management.From the perspective of the outset of financial history and research logic, this article analyses wealth and motivation to possess wealth of people. Based on wealth utility functions and the assumption that consumers'demands would be satisfied during their life cycle, it firstly defines the essential features of financial behaviors aiming at value creation, which is realized when financial bodies display rationality, prepay capital and gain capitalgoods through roundabout production. Then, it has solved some perplexes and confusions of capital essence and its function in academic circle, defined and analyzed the real meaning of capital aiming at value creation. Precisely based on that essence, the article breaks through the Static Equilibrium Pricing analyze framework of "Finance",which is derived from resources deployment theory. This article holds the idea that, capital is the unique production element in roundabout production, which is manifested in the process of dynamic value creation when prepaid capital and capitalgoods are integrated. Its value creation originates from the heterogeneous effect when financial body displays rationality, prepays capital and forms specialized capitalgoods knowledge. Therefore, Finance cannot follow the way of Corporate Finance mainstream, which is influenced by Economics mainstream and inspect the social resources---cash from the macroscopic view, how to realize the optimal allocation and ultimate social integral utility(welfare), through the price-and-market mechanism under established technology and preferences, or "how do individuals and society allocate scarce resources by price mechanism based on the evaluation of risk assets". However, Finance should start from the assumption that microscopic financial body could always display rationality, and then investigate how to realize the process of value creation through the heterogeneous effect of prepaid capital and capitalgoods, which manifests the substantial characteristics of dynamic value management fully based on "Theory of Business School".Based on the above conclusions, firstly, this article constructs some general models and reveals the intrinsic mechanism of financial behavior under certainty from the view on financial body's value creation; secondly, by analyzing the characteristics of specialized capitalgoods knowledge which is acquired and developed when rational financial body realize dynamic value creation, and combining with that dynamic process analyse basis, this article concludes some dynamic financing models of capital and its value creation, and reveals the intrinsic mechanism of capital,which is based on the knowledge acquisition and development, and its financial behaviors aiming at value creation; finally, this article applies those intrinsic mechanisms of capital and its financial behaviors aiming at value creation to the concrete analysing of human capital, organizational capital, social capital, network capital and their value creations when division and transaction in real business.The financial theory framework of capital and its value creation constructed in this article is different from the analyze framework of the Static Equilibrium Pricing in Corporation Finance mainstream concluded in "Finance" and the two-category scheme of its investors and industry producers. This article searches information on industry producers--rational financial body in roundabout production, who prepay capital, acquire and develop specialized capitalgoods and its materialization, and the intrinsic mechanism of financial behavior aiming at value creation. Starting from the foundation of enterprises by entrepreneurs, it analyses how the rational financial body in real business transform human capital into organizational capital through production and division, and then extends human capital and organizational capital into the effects of social capital and network capital through goods exchange, transaction cooperation, capital transaction (finance) and construction of relationship network, and finally realizes the dynamic financial management aiming at value creation.So, the possible innovation or pathbreaking in this article may be as follows: Firstly, it's the first time in this article to analyse systematically those perplex, confusion and controversy about the root of value creation in academic circle for a long time. It reveals the real meaning of capital aiming at value creation when prepaid capital and capitalgoods integrated and defines the essence and logical relationship of human capital, organizational capital, social capital and network capital all over again. Therefore, it not only breaks through conceptual framework and fundamental theory of the Static Equilibrium Pricing analyze framework in Corporate Finance mainstream,which is derived by resources deployment theories, but also supplies a gap of logical relationship between capital and capital theories raised by researchers both in domestic and abroad.Secondly, this article breaks through the theory limits of two-category scheme of Static Equilibrium Pricing analyze framework in Corporate Finance mainstream, reveals the logical clue of value creation activities done by industry producers, and analyses systematically the dynamic financial management from the view on differentiation and development of financial behavior and capital and its value creation. Through the above systemic analyses, the article not only supplies a gap of the imperfect assumptions that those investors without industry producing knowledge in capital market are terminal financial body, but also reveals logical clue of dynamic development and cooperate game under the differentiation of financial body, as people encounter the problems of corporate governance and business financing(include capital structure decision-making).Thirdly, this article reveals the intrinsic mechanism of capital derived from knowledge acquisition and financial behavior aiming at dynamic value creation. By combining this mechanism with the real business of division and transaction, the article constructs a value-creation framework from the effect of human capital, organizational capital, social capital and network capital.Fourthly, this article constructs systematically a series of financing models under certainty or uncertainty, and provides integrated analytical methods of financial management based on capital and its value creation. It combines the physical option with the sequential game analyse, constructs some dynamic financial models and may lay a theory foundation of dynamic financial management in real business.Fifthly, this article reveals the root of value creation is that financial body with rationality prepay capital and acquire specialized capitalgoods and its materialization forms. Thus it not only combines the intangble investments with the tangble investments (fixed assets), but also combines the investment management with the cost management of value creation(capitalgoods circulation).Meanwhile, it's worthy to mention that the article constructs a similar framework of financial theory. Thus, there must be some limitations that how to trasnform the capital aiming at value creation into some material indicators.Finally, the financial framework constructed in this article, which is based on capital and its value creation, could provide a new logical settlement when researchers meet with some unexplainable financial phenomena, according to the Corporate Finance mainstream that ignores industry prodution and dynamic value creation of financial body, and a new theory foundation of corporate value management under the transformation of financial founctions in real business and related finance disciplinary development.