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Abstract

The restructuring of state-owned key enterprises is the major theme to comply the state sector's distribution and structure adjustment, and to enhance comprehensive national power. It is required for raising the core competitiveness of central enterprises and sustainable development. The restructuring of state-owned key enterprises drives the diversification. In this paper, an empirical analysis is given on relation between diversification and EVA in the state-owned key enterprises listed companies researching the effect of specialization ratio (sr), related ratio (rr) and EVA in 2007-2012.The empirical results show that the EVAs of related-diversification companies are the best, the ones of unification are the lowest, and RR is positively associated with EVA, while SR have an U relationship with EVA. In addition, the paper gives advices on restructuring state-owned key enterprises. The conclusions of this paper have great implications on improving state-owned key enterprises restructuring.

JEL classification numbers: L50 O32

Keywords: state-owned key enterprises restructuring; diversification; panel data

(ProQuest: ... denotes formulae omitted.)

1 Introduction

The restructuring of state-owned key enterprises has been a priority since the establishment of the SASAC (State-owned Assets Supervision and Administration Commission of the State Council). 196 state-owned key enterprises was managed at the beginning of the establishment of the SASAC in 2003, but then the number reduced to 123 by the end of 2010.During the "12th Five-Year Plan" period, the goal of state-owned key enterprises' restructuring is to reduce the number to 30-50 .Horizontal merger is an important way of state-owned key enterprises' restructuring, and It accounts for 56.25%. With the restructuring becomes faster, it also accelerates the diversification of state-owned key enterprises: the average number of main business in each company was 2.44 in 2007, and then it increased to 2.75 in 2009; The Herfindahl index, which reflects the main business concentration of 177 listed companies controlled by state-owned key enterprises dropped from an average of 0.6197 in 2007 to 0.6025 in 2009.

SASAC implemented state-owned key enterprises' EVA assessment in 2010. EVA (Economic Value Added) refers to subtracting full cost of equity and debt from the net operating profit after tax, compared with traditional accounting index, it can reflect corporate's capital use efficiency and value creation ability more truly (Stewart, 1991).EVA assessment is designed to guide state-owned key...

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