Different from the pure financial investors, investors of established company not only take financial\nreturns into account, but also strategic benefits. The existence of strategic benefits distorts the\nbehavior of industrial capital for investment. And high valuation is one of its manifestations. This\npaper constructs a model to illustrate the high valuation of industrial capital investment. If a complementary\nrelationship exists between invested projects and industrial capital investor�s core\nbusiness (i.e. strategic benefit is positive), then the industrial capital investment will result in high\nvaluation; besides, if a substitute relationship exists between the invested projects and industrial\ncapital investor� score business (i.e. strategic benefit is negative), high valuation problem also appears.\nThis paper highlights the origin of high valuation problem, and puts forward corresponding\nproposals to solve this problem.
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