The Conflicts Of Interest And Restructuring Performance Of State-owned Listed Companies

The main purpose of this study is evaluating the restructuring performance of state-owned listed companies by analyzing conflicts between stakeholders. The following subjects were studied:1. What principles should be followed in the restructuring of state-owned listed companies? 2. What core interest conflicts exist during the restricting? What is the correlation of these core interest conflicts and restructuring performance? Is there any evidence supporting this correlation? 3. What insufficiencies are there in our management of these core interest conflicts? What kind of experience we could learn from western developed countries.4. How to manage the conflict of core interest conflicts during the restructuring of state-owned listed companies.This dissertation consists of three parts:introduction, main body, conclusion and future works. In the introduction, background and purposes of this study were introduced. The methods used in the study were presented. The innovation of results and future works were discussed. The first chapter is the literature review:the literatures in company restructuring performance and stakeholder theory were discussed from theoretical and empirical views. The second chapter is the preliminary part of the main body. Theoretical analysis was done on the restructuring of state-owned listed companies. And the principles in restructuring of state-owned listed companies were presented. The effective management of core interest conflicts was considered to be the key point of the restructuring of state-owned listed companies. Chapter 3 to 7 is the main body of the dissertation. The correlation of five core interest conflicts and restructuring performance was addressed one by one, and component analysis was performed from different points of view to verify this correlation. How to manage the core interest conflicts during the restructuring of state-owned listed companies was also discussed using experiences from western developed countries. The last part of the dissertation summarizes issues of study and discusses the future work.The following conclusions were obtained from the study:First. two rules should be followed in restructuring of state-owned listed companies.1. State-owned listed companies must control the lifeline of the national economy, play a basic role and dominate the economy development,2. rights and interests of stakeholders should be protected. In order to solve the key problems in the application of stakeholder theory, which were caused by low decision efficiency and difficulties in clarifying the finance objectives, we state as following that financial target should be shareholder-oriented, but adequate compensation must be made to the other stakeholders. Interest conflicts between core stakeholders should be the primary consideration. Second, there is strong correlation between governmental action and restructuring of state-owned listed companies. The long term performance of state-owned listed companies in the severely regional protected region is relatively low. Third, the strong correlation between incentive and restraint mechanisms for managers and restructuring performance of state-owned listed companies can be proved by evidences from the empirical analysis of the correlation of managerial ownership or board size and restructuring performance. Because the number of shares held by general manager is low, the role of incentives is not significant. Even separation of board chairman position and general manager position cannot significantly improve the restructuring performance. Forth, in the countries and regions where the protection of creditor is not well valued, the shareholders are more likely to choose faked restructuring and behaved as opportunist. Fifth, the strong correlation between restructuring performance of state-owned listed companies and protection of minority shareholders can be proved by the evidences from counterbalance over shareholders and the separation of rights of residual control and residual claim. The incomplete supervisory mechanism of independent director cannot put positive effect on the restructuring performance. Sixth, the verification of the correlation between an important index of employee's participating in decision-making which is ESOP and restructuring of state-owned listed companies showed that the ESOP has strong effect on restructuring performance in short term, while the long term effect is not significant. The reasons are low proportion of employees share holding and improper form of employees share holding.There are several innovations in this study:1, it is the first time to evaluate the restructuring performance of state owned listed companies by the view of interest conflict, which enable us to tackle the root of the problem and lay the scientific foundation of theories, policies, and practices.2, well organized and realistic game models are created to analysis the concrete path of the benefit conflict and rearrangement of the enterprises.3, the component analysis was employed in the study. Large amounts of samples and financial indicator data were strictly select in the analysis. The method was focusing on the long term restructuring performance.