An Empirical Research On Market Effects And Finance Performance Of Listed Companies' MBO In China

Management Buy-outs is a brand new way to reorganize assets and optimize allocation of resources of the enterprises in our country. But not all of the enterprises which implement MBO can achieve success because of the complexity and multiplicity of MBO. Especially presently in the process of economic system reformation, MBO was influenced and restricted by many kinds of realistic conditions. As a result, comparing with MBO in western countries, MBO in China has its characteristics in many aspects.Theoretical part of this paper reviews the motivation, theoretical basis and the research status quo of MBO. The author focuses on the demonstration of the various problems existing in domestic MBO from both macro and micro aspects. In empirical research part, the data from the samples of listed companies which implemented MBO from 2002 to 2004 were collected. In order to study the market effects from MBO and MBO's influence to the business performance of the target company, the author makes a statistical analysis, with the help of SPSS 13.0, on the collected data in the general and classified way, using the mathematical statistic methods like Event-study methodology, accounting index analyzing, classified comparison analyzing and parametric test etc.By the theoretical and the empirical research, some useful results are concluded. For example, the market is not sensitive to MBO and has pessimistic expectations; in the year of MBO, certain financial index increases, but it is not obvious; on the contrary, one year after MBO, all the financial index decreases, among which decreases drastically; there are nonlinear relations between the shares transferring ratio of listed company and the company financial performance.On the basis of the conclusion, this paper puts forward some relevant suggestions to the policy, as reference to MBO's regulation and legislation for the administration departments.