Analysis On Economic Consequences In The Privatization Of State-owned Enterprise

In our country, Privatization of state-owned enterprise is a policy and practice since Reform and Opening in 1978. The society obtained the development and people received material benefit through the efforts in the past 30 years. The problem of privatization of state-owned enterprise is always the focus in the academic and practical field. But what about the efficiency, why an endless debate happens in the academic and practical field is that those who support the privatization think that the privatization is efficient, while those who oppose it consider it is lack of efficiency or lack of fairness at least. Many scholars research on privatization of state-owned enterprise in the macroscopic level, however, from the aspect of enterprise, it is not confirmed whether the enterprise performance get improved, the corporate governance become perfect, or whether the protection of the mid-small investors enhanced after this privatization.Firstly, this paper introduces the significance of the topic selection and the background, makes a summary on the achievements about the privatization of state-owned enterprise from the domestic and overseas, and presents the theory of property rights and the development history of privatization of state-owned enterprise in China. Secondly, it studied on the changes of the enterprise performance and the corporate governance pre and posts the privatization of the state-owned by the empirical method, attempted to get some microcosmic evidence of this privatization's effects. From the aspect of enterprise, this article analyzed the changes pre and posts the privatization of the state-owned, whether the enterprise performance get improved, the corporate governance become perfect, or whether the protection of the mid-small investors enhanced after this privatization. On one hand, this paper makes a longitudinal comparison. It selects two performance index, and analysis the average data of three years pre and posts the privatization of the state-owned. On the other hand, it compares the differences of the profits between the privatization companies and the state-owned companies at the same point of time after controlling of the factors which influence the enterprise performance. At last, the results show that:the Privatization of state-owned enterprise has had an obvious effect. From the aspect of enterprise performance, the index of ROE gets improved obviously; from the aspect of corporate governance, the equity decentralization and the decrease of the stock ownership by the large shareholders which plays certain effect on the ownership control; from the aspect of the protection of the mid-small investors, it does not improve obviously from the absolute dividend or the relative dividend payout ratio.It is a long and hard way of the privatization of state-owned enterprise, during which we get remarkable achievement, and there are also many deep problems to improve, during which we also paid great cost. So we should endeavor to change the ideas, prevent the state-owned assets from losing, develop the social security system, and exert the function of the government to proceed the reform smoothly.