The Analysis Of Performance And Risks Of Our Country's Listed Companies By MBO

Management buy-outs, as a new type of financing leverage and acquisition model, has been proved, in the long term practice aboard, to be a very good motivation effect. How about it in our country?This context has, based on reference to many research methods and conclusion in large literature and from the practical viewpoint of our country, sampled 30 listed companies by MBO from between 1998 and 2002; from which it has studied the related issues in terms of the MBO's performance ,the resultant specific risks and the correlation between the MBO's overall performance and risks by such methods as principal component analysis, incident analysis, test of linearity, regression analysis. And the results show as follows:1. MBO does not improve essentially the overall performance and growth quality of the related listed companies.2. The application of MBO will increase financial risk and higher claim for dividend and result in the undermining the enterprise's economic resources.3. The application of MBO can increase individual risks which will increase the corporate overall risk.4. Although there is relationship to some extent between the overall performance and risk of MBO, it is less obvious from the viewpoint of statistics.This context has undertaken deeply study from qualitative angle and ascertains:1. The performance without being obvious of MBO results mainly from the background in which our country's MBO accrued, the inapplicable directive theory, the two-dimension proprietorship structure and irregular transaction methods.2. No active capital market and the single channel of financing and repayment are the main reasons for the high debt risk and the trend for distribution of high dividends.3. The main reasons for the losing of corporate economic resources are no reasonable transfer price, the management seller-buyer identity and operation in black box.4. The increase of individual risk, various unethical behavior and so on result largely in the increase overall risks of MBO.5. The elements such as the correlation between specific risk and related performance ,the existence of weak effective capital market are the main reasons for that there is no obvious correlation between the overall performance of MBO and its related risks.Conclusion:The listed companies are not applicable to MBO unless all their shares are circular, there is external mature regulating systems for capital market, there are strong internal supervision and external regulatory monitoring for management.