Study On China's Large State-owned Enterprise Management Buy-outs

Management Buy-outs(MBO),as one model of enterprise merger and acquisitions, i s an institutional innovation. MBO is still in the initial stage in China at present. So me corporations have tried MBO and acquired some experience. Property Reform and Manager Incentive are two fundamental functions of the MBO in China nowadays. It is proved that MBO work actively in reducing agent cost, rebuilding the incentive and constraint institution, improving efficiency in foreign countrys. But in China, kinds of problem occurred during the MBO implementation because of the low efficiency in market economy, poor capital market and lack of relative laws, which has attracted th e attention of the academia and government. There is great significance in research an d explore MBO nowadays in China. Based on the property right theory, principle-agen cy theory, corporate governance theory, incentive theory, human capital theory, and ent repreneur theory and with the game theory as the main research tool, this paper make a study about reforming state-owned enterprise property right, perfecting the corporate governance and building incentive and restraining mechanism for management during the MBO application.