Empirical Study of The Relationship Between Valuation and Risk Over Chinese Listed Commercial Banks

This paper uses a multi-vector econometric model to calculate the relation between Chinese listed commercial banks' Tobin's Q ratio and the risk variables of Rate of Return on Common Stockholders' Equity, deposit-loan ratio, capital adequacy rate and Non-performing Loans rate. The result shows that a high profitability always receives a high valuation from stockholders and debtors for our listed commercial banks, and the risk variables have significantly effect on Tobin's Q index but for some reason, the result is different from our assumption and general theoretical analysis for the result, to solve this problem further theoretical and empirical works need to be done.