Research On The Control Rights Of Listed Companies Based On Merges And Acquisitions

Corporate control is frequently used to describe many phenomena ranging from the general forces that influence the use of corporate resources to the control of a majority of seats on a corporation's board of director. It is the pivotal problem of corporate governance. Different arrangement of control directly affects a series of company's doings. Recently, merges and acquisitions emerge in endless in China's capital market, and the transfer of listed company's control oftentimes takes place. Under this background, it is momentous academic and practical significance to research China's listed company's control. Making a comprehensive view, we find most of previous studies can't fully explain the essential cause of the problem of control. The paper attempts to explore this essential cause in theory and demonstration, which is also breakthrough and innovation of this paper.Control structure is the status of control allocation among interrelated people. From the historical view, the evolvement of ownership structure induces the change of control structure, but they are dissymmetrical. Under market economy, the measures to solve the problem between control and profit are inner and exterior restriction mechanisms. Especial ownership structure of China's listed company causes that the control structure is freaky and the agency conflict between controlling shareholders and minority shareholders becomes the outstanding problem of control. The market for corporate control is an exterior balanceable mechanism when inner restriction mechanism can't work. Different ownership structure has different way of the transfer of control, and a model of transfer indicates that more inefficient merges and acquisitions will take place under concentrated ownership structure. It is demonstrated that the transfer of control of China's listed company can't improve firm value. On the contrary, it is a means to obtain private benefits used by controlling shareholder. Private benefits of control is the core of agency problems between controlling shareholders and minority shareholders, and is also an act of plundering saddled on minority shareholders. Analyses in property rightindicate that dissymmetry between residual claim rights and residual rights of control offers controlling shareholders an opportunity to expropriate minority shareholders. Seeking private benefits of control will force controlling shareholders to be involved in arbitrage and heighten the risk of firm operation, and the result of repetitious dynamic game is that the firm lacks economic efficiency and even will go bankrupt. Demonstration study indicates that the extraction of private benefits in China is a very real phenomenon and the value of control is relatively large even among developing countries. The key to improve the status of corporate control is cutting off the route for controlling shareholders to extract private benefits and increasing controlling shareholders' cost of breaching contracts.