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Analysis on Value Effects of Funds Management Based on GRE Model

Li Wang, Guiwen Liu

Abstract


To improve the efficiency and effectiveness of funds management, therefore, the paper tries to find a new perspective of funds management from the driving forces of value creation, establishes the GRE model for the value creation effects of funds management with the standard of “suitable growth with quality”, which is based on growth, risk and EVA three dimensional balanced angle, extending the way of funds management to a relatively multi-angle from a single one. After that, a sample of 83 Chinese firms in the real estate industry listed on Shanghai and Shenzhen Stock Exchange in 2011 is selected. Survey results suggest that: (1) FU and EFS have positive impacts on EVA, and has negative impact on the value creation via growth and risk. (2) Managers do not control corporate value, growth and risk well. It is different from the traditional regression analysis, the GRE model has goodness of fit, and it can not only explain the direct/indirect impact on the value creation but also present the pathways and their influence degree.

Keywords


funds management, value creation, real estate.

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