Research On The Impact Of Specific Asset Investment On Enterprise Value

Enterprise investment in specific assets is an important way to realize “Created in China”,but the risks and benefits of investing in specific assets coexist,and scientific decision-making needs to be combined with the company’s functional positioning,strategic transformation and development cycle stages.Enterprises investing in some special assets may be able to obtain excess returns,reduce transaction costs,and even successfully transform,but there are also huge fixed costs and market risks;At the same time,enterprises with different property rights bear different responsibilities,and the direction and size of their specific asset investment are also different.How enterprises should invest in special assets according to their own conditions and how the government should guide and support the investment in special assets of related industries are important practical issues that all parties need to consider.The existing research on the relationship between the level of specific investment and enterprise value is mostly limited to the static level.Based on the perspective of enterprise life cycle,this paper systematically analyzes the differential impact of specific asset investment on enterprise value in different life cycle stages,further investigates the heterogeneity of the relationship between the two in different property rights of enterprises,and gives the idea of enterprise value evaluation in different life cycle stages.We select the panel data of China’s listed companies from 2013 to 2019 for empirical analysis,and the results show that: the actual impact of specific investment on enterprise value is significantly different due to different stages of enterprise life cycle.Specific investment in growth period has a positive effect on enterprise value,a negative effect in maturity period and no significant effect in recession period;the effect of maturity is more obvious in state-owned enterprises.It is further found that this difference is due to the trade-off between continuous rent and transaction cost caused by special asset investment.At the same time,this paper makes a case study on the empirical results,selects three listed companies in the growth period,mature period and recession period respectively,analyzes their specific asset investment,calculates the enterprise value of various methods,discusses the selection of enterprise valuation methods in different life cycle stages,and also confirms the view of this paper.The research conclusion shows that in the different stages of the enterprise life cycle,the specific investment has a dynamic effect on enterprise value,and there are heterogeneity differences in the nature of enterprise property rights.Therefore,the enterprise value evaluation methods should be different,and enterprises need to actively adjust asset allocation in combination with their life cycle stages and their own characteristics.