Study on Value Effect of Fund Management Based on GRE 3D Balanced Perspective: A Case Study of Listed Companies in Construction Industry and Real Estate Industry

Abstract

Fund management is an important part of enterprise finance management and is closely related to enterprise management strategy and financial management objective. This paper set listed companies in construction industry and real estate industry on stock markets of Shanghai and Shenzhen in China as the study sample, constructed an analytical framework of fund management effect based on 3D balanced perspective of EVA, growth and risk, investigated the fund management effect of domestic construction and real estate enterprises, and obtained useful information about economic development in construction industry and real estate industry. The methodology involves understanding the determinants of enterprises’ value creation through: (1) an extensive literature review; (2) collection of financial and managing data from listed companies; and (3) analysis of data to identify value effect of fund management that are more effective in real estate enterprises. Regression analysis reveals that the fund management effects are poor both in construction enterprises and real estate enterprises: there is significant negative correlation between value creation efficiency of enterprise and the enterprise scale, the resource allocation is unreasonable between short and long term assets, and economies of scale cannot be reflected. In path analysis on sub-samples, the previously significant correlation coefficients have become insignificant, showing that administrators of construction enterprises and real estate enterprises have not controlled the EVA, growth and risk well and the balance theory of income and risk has not been reflected. Contrastive analysis presents that fund and resource allocation and management level of construction enterprises and real estate enterprises is low in China at present, and fund management level of these two typical capital intensive industries should be improved urgently. Findings from this study could provide helpful guidelines for construction and real estate companies in developing countries. Recommendations for achieving future value creation are also provided.