A Positive Study Of Finance Performance Of Listed Companies' MBO Of China

As one new method to reform property right system, the Management Buy-Outs (namely MBO) recently became one of the most disputed topics about the state-owned enterprise property right transforming in China stock market: The supporters call it the effective method to reform state-owned enterprise and consummates the incentive mechanism; The other side points out that many kinds of benefit side in the practice appear to use the MBO to embezzle the state assets and encroach on the shareholders'benefits. So they oppose the MBO. The related policy from supervising and managing level has also changed several times because of all sorts of arguments.The overseas research believed that MBO reduces the agency cost with the aid of the debt exterior restraint and provides opportunity for the entrepreneur using the risk capital to promote company performance. Simultaneously the positive study also indicated this company achievement is remarkably improved. The positive conclusion is consistent with the economic theory. But our country is actually various in this aspect research conclusion. Moreover there is only some partial experiences case research and little positive study about the company performance. This article will unify the Chinese enterprise to show the MBO performance theory, and use the positive study to analyze the enterprise achievements influence after MBO event, and finally analyze its reason to instruct the Chinese enterprise about the MBO practice.The article altogether divides into six parts. The introduction part mainly introduces the research background, the intention of topic, the research technique and the structure arrangement.The first part is the economic analysis. I carry on the theoretical analysis to MBO this phenomenon separately from the human nature aspect premise supposition for business management level, the agency theory, the modern enterprise property right theory, the human capital theory as well as the company structure, the entrepreneur function and so on. The analysis result indicated that MBO has both its advantage and short-coming. Whether China's state-owned enterprise reforming select this kind of method or not needs to regard the special details to decide.The second part includes Chinese and foreign MBO fundamental research summary as well as positive study summary. The overseas study mainly concentrates on the MBO fundamental research in the following three aspects: MBO theory basis, positive study of MBO implementation achievements, the MBO life cycle and so on. The positive study mainly concentrates on the financial character, governance mechanism, the strategy transforming, achievements and MBO life cycle and durability. The domestic research mainly concentrates on the related theory basis and the introduction and the analysis of the actual operation. The positive study still paused in simple statistical and the description analysis stage. Through the analysis, I had discovered some insufficiencies in domestic research, for example, the insufficient sample coverage,the deficient research technique and so on.The third part is the Chinese and foreign MBO research comparison. I compare them from the implementation environment, the operation mechanism, the fixed price, financing as well as the risk capital involvement degree and so on. Not all enterprises suit to the implements of MBO. The implement of MBO in China needs some conditions. The company will obtain the success only when these conditions are satisfied.The fourth part is about the positive study on the finance performance of the listed companies. I selected 15 listed companies that had implemented the MBO and divided them into 3 groups according to the transferred stockholders'right promotion.Then I make a comparative analysis on the financial norm. Through this compare, I find that the MBO has little positive influence on the listed companies. Furthermore, I use the Factor Analysis with SPSS and make a function of the synthesis scores of the companies'performance. Through the result, I obtain the conclusion that the MBO did well to the companies in short time. But as for the long term, the achievements improvement of listed companies is not obvious after the MBO. And some were even worse than before.The fifth part carries on the analysis regarding above result. MBO lacks the positive influence on the listed companies. And we believe there are mainly two reasons: on the one hand, the MBO has flaw itself. It is only one kind of transition investment behavior which carries on under the mature stock market and the reasonable financing condition. Once it had the appropriate condition and can make a profit, they always send out the purchase contract. After the enterprise has been good enough, it goes on the market again. Once again it becomes the new listed company. Broadly speaking, MBO is only one kind of transition investment or the congenial behavior. It is only suitable to the specific enterprise. We can carry on this kind of enterprise to change the system only if the condition is satisfied. On the other hand, in the present stage of our country, from the system environment, the market mechanism to the state-owned enterprise's government structure, we have a very big difference with the overseas. Therefore, I thought the state-owned major industry is not suitable to implement MBO in current situation, but the small and medium-sized enterprise may have the choice to carry on the reforms.The sixth part is the conclusion part. It points out that there are a series of strict conditions to make MBO operate standard and display a positive role. But we don't have these conditions in now China. If we attempt to implement the MBO, the result may be opposite with the expectation. It may provide the opportunity to embezzle the state asset and do harm to the shareholders'benefit. At last, I put forward several policies proposals to current MBO of our country.