Evolution Of The Market For Corporate Control Based On Ecology

There are two benefits in research on the internal evolution mechanism of the market for corporate control.On the one hand it can predict the market development trend of the world(or a country),on the other hand it is also conducive to create a favorable external environment,enhance the functions of the market,improve market efficiency and especially it is significant for guiding development of China's market for corporate control.The research on the market for corporate control began the study on the M&As activities(merger wave) and empirical researches are far more than theoretical researches.In fact,there is not a recognized theory can explain the motives of M&A activity,the characteristic of both sides enterprises and the determining factors of the concentration degree of M&As activities.M&A Histories in different countries show that each wave of M&A has different drivers(including regulation and economic factors),there is not a unique factor can explain the development of M&As activity.At present,among the existed researches on the developing and evolution of the market for corporate control there is no theory can fully explain the role of the objective environment(such as economic factors,legal factors) and the main players factors(both sides of M&As transactions,etc.) in the developing and evolution of the market for corporate control and also no one can explain the final force of the development of the market for corporate control.The paper makes an effort on the following aspects.The author combines the ecology theory and theory of the market for corporate control to puts forward the concept of "ecosystem of the market for corporate control". The market for corporate control is composed of market environment,the main bodies in the market and the market adjustment mechanism.The environment of the market for corporate control includes six factors:cultural factors is demonstrated via the formal system which are economic factors,political factors,legal factors and technical factors making effects on corporate governance environment in which the shareholding structure is the core factor.The characters of main bodies in the market for corporate control are determined by the freedom degree of transactions between enterprises.The market adjustment mechanism is a mechanism of self-organization but government regulation plays a very important role in it.The paper attempts to introduce some concepts and methods of the ecological evolution theory and evolution economics meanwhile brings evolution analysis into the new classical analysis framework to research the working mechanism and evolution path of the market for corporate control.The study discovers:The evolvement of the market for corporate control shows the characteristics of fluctuant evolution and it almost develops synchronously with macroeconomic.The path dependence of the market for corporate control starts from its original corporate governance structure.The path dependence of the market for corporate control mainly performs in four aspects: technical,institutional,cultural and its main bodies.Achieving innovation in the market for corporate control has to break the abovefour aspects of path dependence,meanwhile there is a strong universal rule in path choice in the evolution of the market for corporate control.Based on the maximum entropy principle methods the paper builds an evolution evaluation model of the market for corporate control and applies the model to vertically comparatively analyze the markets for corporate control of British and American.The empirical studies show that the model calculated annual entropy value of the market for corporate control presents an obvious feature and it can accurately describe the characteristics of evolution or recession or the speed of the evolution of the market for corporate control.And again the empirical result shows that the evolvement of the market for corporate control is a process of fluctuant evolution and the overall trend of the market evolution is developing.The paper also discovers that the gross domestic product(GDP) index in economic environment factors is the most important order parameter in the market evolution and it becomes more obvious in the background of economic globalization.Finally,based on the results of evaluation model,the paper designs the index of market for corporate control and the simplified market index plus its derivative M&A environment index and M&A using index and uses both historical vertical analysis and horizontal cross-country methods to take an empirical analysis and testing of nine countries.The results show that the index of the market for corporate control is one of the most effective indicators measuring the degree of marketization of a country's market for corporate control.These indices can be used to evaluate the effect of the regulation implementation of government or industry and to measure the market investment environment and the applying of M&A means of the market for corporate control.So it can support like government,industry and enterprise such different levels to make decision and also help to exert the function of the market for corporate control to lead the market to evolve in the direction of developmental.