Governance Factors Of Mergers And Acquisitions Of Securities Companies In China

Since the reforming and opening, the finance system of China has been changing from planning economy to market economy. The stock market of China was set up and developed step by step under this progress. As the important basis of the stock market, the securities firms of China developed under the situation without experience and theories. The over ten-year development of the securities firms includes both rapid expanding progress and many difficulties.Companying with the bear market coming from 2001, the securities firms occurred industry crisis and emerged a new-round tide of M&A. Currently the M&A is necessary to the securities firms, and is related to the survival and development of the whole industry. The thesis analyzes the history and actuality of M&A of the securities firms briefly, and then emphasized on studying the M&A of the Chinese securities firms from the point of corporate governance under the background of the shunting economy.The structure of the thesis is based on the governance structure of the securities firm. Through analyzing the character of important interior and exterior governance factors, the thesis studies how the factors affect the M&A activities. Some cases and data are used to test and explain the conclusions. The study scope includes exterior governance factors' effect, like policy environment, government intervention and competitive market, and interior governance factors' effect, like shareholders, management, emplyee, organization and culture. The method of study includes determining the nature and quantity, and carries on the theories and methods of economics, management, econometric analysis, game theory and case study, etc. The study of determining the nature is applied widely in the thesis while the quantitative study is applied mainly in the factors of shareholders and management.During studying, we find that currently domestic papers hardly study M&A from the point of corporate governance while abroad papers focus on the listing companies. However, the papers declare that the governance factors have important affection on M&A activities, but the main appraisal index of the papers are fluctuation of stock price and finance index. Since the most of Chinese securities firms have not been listed and seldom disclosure related information, the thesis cannot study with the information of stock prices and finance reports. For the reason, we start from the structure and effect ofgovernance factors, and then we set up different models to study. The thesis applies Logit model to study the effects of shareholders and management, and applies the Robinstein model to study the M&A efficiency under different M&A dominated ways.The major conclusions of the thesis include: the M&A of Chinese securities firms is in the primary stage companied with the obvious character of shunting economy. Exterior governance factors, like policy environment, government intervention and competitive market mechanism, are disadvantage to the efficiency of M&A; The centralization degree of shares and the state-owned holding nature have obviously reversed relation to the occurring of M&A; Marketable M&A of securities firms is advantage to the benefit of shareholders while unmarketable M&A is disadvantage for the reason of the state-owned holding nature; The high shareholding ratio of big shareholders which occupy many seats in board is disadvantage to M&A; The low ratio of independent directors in board is disadvantage to M&A; For the lack of stock incentive, the benefit of management is different to that of the shareholders. As a result, the management could make a M&A decision which is disadvantage to the shareholders; For the lack of stock incentive mechanism, the M&A utility of emplyee is different to that of shareholders and management, which have heavy effect on the result of M&A; The conformity of organization and culture is simply treated, which also have heavy effect on the result of M&A. In a word, currently the interior and exterior governance factors of Chinese securities firms obviously restrict the marketable and efficient M&A and are disadvantage to the industry development. It is necessary for Chinese securities firms to reform exterior environment and governance structure.The content of the thesis includes: Chapter one, introduction; Chapter two, the analysis of current situation and character of securities firms' M&A; Chapter three, the study of exterior governance factors' effect upon Chinese securities firms' M&A; Chapter four, the study of interior governance factors' effect upon Chinese securities firms' M&A—share and shareholders; Chapter five, the study of interior governance factors' effect upon Chinese securities firms' M&A—management; Chapter six, the study of interior governance factors' effect upon Chinese securities firms' M&A—employee, organization and culture; Chapter seven, conclusions, suggestions and shortage.