An Analysis Of The Influence Factors Of Public Companies' Value Creation In Chinese Petroleum Industry

With the spread of international financial crisis, the economy situation of the whole world changes quickly, being faced with the competition pressure of the era of meager profit, company management has to face challenges. All kinds of industries try to look for the way out of the increase in value. The petroleum industry of China is regarded as the most important industry related to the national economy and the people's livelihood, the analysis of its ability to create value and its influencing factors become very important. Therefore this paper chose value increase as respect; selected listed companies of the petroleum industry of China as object of study; in order to explore the influencing factors of the value increase of the petroleum industry of China.However, predecessors had adopted many methods to measure the enterprise value. The most representative ones are as follows: the traditional performance evaluation index based on the Du Pont financial analysis system, balanced score card, EVA and so on. The paper comparatively analyzed the three methods above in the form of Literature Review, the author found EVA had remarkable superiorities when the author measure enterprise value creations. So the paper studies the influencing factors of the value increase, the author only needs to discuss the relativity of a few indexes with EVA. Usually, regarding to the studies of enterprise value increase, predecessors had studied profitability, growth ability, operating capacity, risk level. In addition to the four factors above, the paper takes corporate governance theory into consideration, thereby the paper discussed the factors of the enterprise value increase more deeply, to expect more value increase. Therefore, within the framework of residual income theory, the paper selected empirical data from China's petroleum industry between 2001 and 2009, through building a multiple linear regression which regarded value creating capacity, performance appraisal index as independent variables, companies'scale as control variable to empirical analyze the influencing factors of companies'value creating. The paper used document analysis, Descriptive statistical analysis, correlation analysis, and multiple linear regression, and used the previous index variables as the current year's independent variables and control variables to regression analyze, and test the model's robustness.The research found that the current year's EVA increases negatively with the free cash flow which represented risk level and whether board chairman and general manager hold a concurrent post which represented corporate governance level, and positively with the natural logarithm of total assets which represented companies'scale. However, companies'free cash is inversely proportional with risk level, but petroleum industry's risk level is positively with EVA; board chairman and general manager hold a different concurrent represented the company's governance level is higher, the ability of creating value is stronger, this indicates that the company's governance level of petroleum industry is positively related to company's value creating; the company scale of petroleum industry is positively related to company's value creating. Furthermore, when we use the previous year's variable as independent variable, control variable as the current year's variable, and in the same way use regression analysis on the empirical model to test the steady, we found that the relationship of the current year's EVA ,the free cash flow which represented risk level and whether board chairman and general manager hold a concurrent post which represented corporate governance level is consistent with the conclusion that using the current year's variable. Therefore the test result testified the model's steady. According to the conclusion above, value creating of China's petroleum industry is influenced heavily by the company's risk level, company's governance level, and company's scale. the paper come up with a few policy recommendations to companies'managers. The author expects the listed companies of the petroleum industry of China to strengthen the free cash flow management, to establish a reasonable board size, in order to make listed companies of the petroleum industry of China from the point of value added to improve operating efficiencies and to promote China's petroleum industry develop healthily.