Theoretical And Empirical Study On Management Buyouts Based On Gaining Residual Claim Right

On the basis of new-institution economics and in the framework of technique of modern finance, and with the aim of explaining and instructing the MBO in China, this dissertation studies a theoretical and empirical research on management-buyout based on gaining residual claim right. The main contents are as following:1,The enterprise is regarded as a set of covenants among different factor-owners in this dissertation and MBO is regarded as a new covenant between the managers with residual control right and the owners with residual claim right. The new contract makes the Claim to firm's residue combined firmly with the claim to firm's residual control, firm's risk and firm's large amounts of debt. MBO resolves preferably the two issues inside the firm: the one is how to incentive the manager, the other is how to select the manager.2,Based on the presuppositions of the manager holding naturally firm's residual control and the shareholder having naturally the residual claim right, different incentives of different distribution arrangements of return between different participants(factor-owners) is analyzed.To be a typical combination of the claim to firm's residue and the claim to firm's residual control, MBO is an important institution arrangement which could make the managers work harder than the past. The result of this new arrangement is good for reducing agency cost and preventing opportunism while the shareholder cannot monitor the manager in condition of asymmetry information.3,The shares of companies listed in China are still exchanged after buyouts. This characteristic makes it possible to research long-term wealthy effect based on the changing prices. The novel contribution of this dissertation is to use prevalent case study to explore long-term wealthy effect in China. This result of existing long term abnormal return not only reflects the short-term wealthy effect in western countries, but also validates the theoretic conclusion in this dissertation.4,A critical policy issue concerning MBO is whether they enhance economic efficiency. The purpose of this study is to extend economic efficiency in two important ways. First, we analyze financial performance with the aid of the comparatively analyzing technique. Second, we analyze management performance of this kind of companies. Our results suggest that MBO may be a useful mechanism for reducing agency costs and enhancing economic efficiency. This evidence can be the outcome of gaining firm's residual claim by the manager and the source of"new information"which causes long-term wealthy effect.5,We build up a research frame about the study on MBO based on gaining residual claim right in this dissertation. The hypothesis, the argumentation and the conclusion of the research are unanimous. Especially, the research of long-term wealthy effect not only draws a novel conclusion, but also gives MBO an affirmative evaluation.