EVA’s Influence on the State-Owned Enterprise’s Investment Behavior

Abstract

EVA (Economic Value Added) performance measurement has been implemented in Chinese state-owned enterprises for three years since 2010. EVA performance measurement’s influence on the enterprise’s investment behavior was empirically analyzed with the sample of state-owned listed companies. The results showed that the enterprise’s investment behavior were subject to significant influence after the implementation of EVA performance measurement. The implementation of EVA has significant positive influence on investment behavior. It stimulates managers to choose investments that can really improve corporate value and then effectively guide their investment behavior. Therefore, EVA performance measurement helped the state-owned enterprise’s investment behavior more scientific and rational.