Abstract:Specific assets endow companies with heterogeneous characteristics and product competitive advantages, and bring “continuous rents”, which is conducive to the enhancement of corporate value. However, the increase of specific assets will also lead to an increase in transaction costs. Excessive specific assets may make the increase of transaction costs exceed the “sustained rent” obtained, thus inhibiting the improvement of enterprise value. During the growth period of the life cycle, companies need to make a large amount of specific investment to form a competitive advantage and expand the market. The increase in the proportion of specific assets will promote the increase of corporate value. In the mature period, the competitive advantage of the enterprise is basically formed, the market tends to be stable, and the gradual expansion of scale also increases the transaction cost. The increase in the proportion of specific assets is not conducive to the increase of corporate value. In the recession stage, enterprises are facing the challenge of transformation and upgrading. If they are still keen on scale expansion and continue to increase the specific investment of original products, the improvement of corporate value will be further inhibited. If they actively innovate and transform and increase the specific investment of new products, it will promote the improvement of corporate value. The analysis of China’s A-share listed companies from 2010 to 2019 shows that in the sample companies during the growth, mature, and recession stages, the proportion of specific assets and corporate value show a significant positive correlation, a significant negative correlation, and no significant correlation, respectively, and the negative effect in the mature stage is more obvious in state-owned enterprises than in private enterprises. Therefore, enterprises need to proactively adjust asset allocation according to the stage of their life cycle. Enterprises in the mature stage should pay attention to saving transaction costs and increasing universal investment to improve management efficiency, technological innovation and market adaptability, and state-owned enterprises should avoid blind expansion. Enterprises in the recession stage should actively seek new specific investment directions to achieve innovation transformation or development transformation. Moreover, different investment support policies or restrictive policies should be implemented for enterprises in different stages of the life cycle and with different property rights.