The Influence Of Market For Corporate Control On Technology Innovation

Technology innovation, as an essential role in economic growth, determines the long-term competitiveness of a corporation to a large extent. In recent years, with people attaching more and more importance to technology innovation, many scholars have focused on the study of the factors that influence technology innovation. The results indicate that corporate governance mechanism has become a key point among these factors. Furthermore, market for corporate control, as one of most important external corporate governance mechanism, not only plays a crucial role in restraint of management behavior and settlement of agency problems, but also affects a corporation's innovation decisions.Although some foreign scholars have made an intensive study in influences of market for corporate control on technology innovation, there hasn't been a theoretical frame established to explicate this problem, because most of the scholars concentrated only in empirical research so far. On the basis of the previous researches, this paper attempts to establish such a collective frame applied to the analysis between market for corporate control and technology innovation. Generally speaking, market for corporate control affects technology innovation in a very complex way. It will exert an influence indirectly through internal governance, or directly by means of control transfer. Whatever the case, there must be both positive and negative effects engendered. Accordingly, the final results will subject to the extent of which kind of influence produced.In order to verify the final effects market for corporate control exerting on technology innovation, this paper makes a comparative analysis of market for corporate control between Japan and America, two countries who possess the most innovative corporations in the world. On the one side, the market for corporation control is long-established and very active in America, because the corporation governance with"market model"attaches much importance in the function of corporation control market; on the other side, as the corporation governance of"relation model"in Japan tends to treasure more about the internal governance, the market for corporation control is not so long standing in Japan. Despite this, it's activeness has been greatly promoted in recent 20 years. This paper, besides making comparisons for the market for corporation control between the two countries from the point view of its development and features, even more important, illustrates the main differences of influence on technology innovation between the two countries. Furthermore, this paper gives a relevant analysis on the basis of related data of both countries from the year 1991 to 2005. and finally draw the conclusion that technology innovation can be accelerated by the market for corporation control to a certain extent both in Japan and America.Finally, on the basis of the above analysis, this paper, after investigating the development states of Chinese market for corporation control, offers proposals with hopes of enhancing the technology innovative ability of corporations in our own country in the process of promoting the development of corporation control market.