Study On The Effect Of Control Transfer On Listed Companies' Performance Of China

Corporate control is the central problem of corporate governance, and the main changes of control have a direct impact on the company's performance. Recently, more and more control transfer events have emerged from the Merger & Acquisition (M&A) of listed companies in China. Corporate control transfer in our country has a common characteristic of M&A, and its own popularity as well, resulting from the special background of stock liquidity. Then the author analyzed in the article whether control transfer would also contribute to creating value for the shareholders and enhancing corporate performance, which is an important subject which needs an empirical study urgently.The article made an overview of academic literatures on control transfer at home and abroad. Firstly, the author began with the analysis of realization and transfer approaches of corporate control in China, clarified the basic concepts of control and the conditions of Chinese listed companies control, and then analysed the approaches and the affection factors of control transfer in our country. Subsequently, the author introduced the motivations and evaluations of performance-based control transfer. Firstly, we represented the corporate control market, and started with the hypothesis theories of control transfer, then analysed the motivations of performance-based corporate control transfer, and lastly explained the evaluations of control transfer on performance. The author selected 60 companies as the total samples from paid transfer listed companies of Shanghai Stock Exchange in 2002, and used factor analysis and margin analysis. Meanwhile, we selected 12 financial indicators which reflect the situation of profitability, asset quality, debt-risk and business growth. Finally, the author analysised the financial performance of control transfer of the overall samples and manufacturing samples comparatively from 2002 to 2007.The empirical results showed that the improvement of corporate performance was significant in the current period, but was inefficient in the short term, but was significantly effective for the medium and long-term after corporate control transfer. Eventually, the author made the following recommendations:(1)to strengthen resources management and improve the synergy after control transfer;(2)to improve the market structure of control transfer;(3)to prevent the manipulation and speculation of performance after control transfer, and reform the performance evaluation system of listed companies;(4)to continue to promote the equity reform and build an effective capital market;(5)to keep from damaging the interests of small and medium-sized shareholders by transfering control, and protect their rights and interests;(6)to enhance market supervision and control system.