Analysis Of Governmental Function In Enterprises' Merger And Acquisition In China

In the past 20 years, enterprises' merger & acquisition tides in China are vigorous day by day and attract people's attention. Accordingly, researches on theories of M&A become hot topic. Some scholars make researches on function of government in M&A under institutional transition in China. However, there are few penetrating empirical researches on function of government.This paper chooses the topic Analysis of Governmental Function in Enterprises' Merger and Acquisition in China, and wants to discuss what role of government plays in M&A. After summing up governmental functions mentioned in Chinese materials related with M&A and governmental interference, we make empirical test and find that those functions cited as reasons for China's government to intervene M&A haven't been brought into play. And then based on capture theory of regulation, we explain that this result is inevitable with game theory. At last, we draw conclusion that government should reduce intervention in M&A since the above reasons don't exist. This paper includes 5 parts. Part 1 is an introduction with stipulation of concepts, research method and innovation. In part 2, firstly we review and comment on domestic and foreign theories related with M&A and governmental interference. Then we point out that there's limitation of western governmental interference theories when they were applied in China, and that there're defects and inadequacy of Chinese existing related research materials. In part 3, we make empirical test of those governmental functions mentioned in related materials of M&A and governmental interference. Statistics and analysis show that those functions cited as reasons for our government to intervene M&A, such as reducing erosion of state-owned assets, protecting interest of relative interest agents, optimizing industrial structure, playing roles in department coordination and an media replacement, in fact haven't been brought into play. In part 4, we make theoretical explanation as to function of China's government in M&A. We use game theory to explain why government cannot realize those five functions from micro level. In addition, we demonstrate governmental inefficiency in macro level that brought by governmental interference, and make further comment on hypothesis and logic reasoning that advocate government should intervene in M&A in the past materials. In part 5, we make inquiry into how to bring governmental function into play in M&A under condition that state-owned property rights take dominant status. And we think that government should reduce intervention in M&A and should focus on establishment and protection of market system.