The Effect Of Control Transference On Listed Companies' Long-run Performance

Corporate control is the central problem of corporate governance, and different arrangement of control directly affects companies' behaviors. Recently, more and more control transference events have emerged in the capital market of our country resulting from emerges and acquisitions of listed companies'. Control transference of our country has a general characteristic of M&A, and its own specialty as well, resulting from the special background of restrain to stock fluidity. Then we will analyze in the article whether control transference would also contribute to creating value for the shareholders and enhancing company achievements, this is an important proposition.The article first makes an overview of research on corporate control transference, and introduces the condition of control transference in our country. We select the control transference events from 1999 to 2001 of 124 A share listed companies of our country, and divide all the samples according to transference modes, different investors, changing the main business or not. We choose 36 months as time windows to research the long-run market effect with event study, and choose 12 financial indexes from five respects of profit ability, cash ability, debt paying ability, managerial ability of the assets and growth ability, to research financial performance variation after control transference with factor analysis. The study leads to the results: Corporate control transference didn't help to create value or improve enterprise performance from long run; On the whole, events completed by contracts performed better then those completed without contracts; Performance decreased after being controlled by government, while those controlled by private and legal-person companies performed well, but private companies achievements were not as good as expected; Companies who has changed the main business perform better then those who didn't, but didn't last long.Short-term, speculation and blindness lead to the failure of control transference in our country, and it's necessary to strengthen corporate supervision to improve corporate governance and enhance the efficiency of control transference.