Investment Value Evaluation of Hi-Tech Industry: Based on Multi-Factor Dynamic Model

Chen Liu, Yang Liu

Tianjin University of Finance & Economics, Tianjin, China.

DOI: 10.4236/ojbm.2014.23027                

Abstract

By constructing a multi-factor dynamic model based on the theory of the lifecycle with China’s A-share data from 2007 to 2013, we analysis the factors affect the investment value and risk of hi-tech industry and their mechanism of action. After the regression, we can draw conclusions: Firstly, hi-tech industries in China are mostly in the growth stage and maturity stage. Investment value of the industries in the growth stage are mostly influenced by market premium factor, market factor, P/E ratio factor and R & D density factor, while hi-tech industries in maturity stage are mainly affected by the market premium factor, market factor, P/E ratio factor. Secondly, dynamic multi-factor model can measure the investment value of hi-tech industries adequately. The conclusions give a reference for investors on how to make investment plan on the stocks of hi-tech enterprises, and provide some policy recommendations on the way promoting hi-tech enterprises to enhance their core technology as well.

Keywords

Multi-Factor Dynamic Model, Space State Model, Hi-Tech Enterprises, Investment Value

Conflicts of Interest

The authors declare no conflicts of interest.

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