Based On The Rent-seeking Behavior Of Our Management Buyout (mbo)

The 90's of last century, in the backdrop of the reform of propert rights of state-owned enterprises, the state implementing the strategy of state-owned enterprise withdrawing from the economy and the private enterprise entering into the economy and the collective enterprises demanding achieving against the return of propert rights, MBO was introduced in our country as an important mean of the reform of state-owned enterprises and propert rights. In Western countries, MBO have an important role in the clarity of enterprise property rights, positive incentive for insiders, the reduction of agency costs, the improvement of enterprise performance and the rise of efficiency of operation about enterprise capital market, but in our country, MBO is a new issue of reform about enterprise property rights, and due to the difference of the social and economic system as well as the level of socio-economic development, compared to Western countries the result of MBO is very different. From the enterprises which have already implemented MBO, the MBO in our country exists mostly rent-seeking behavior. These rent-seeking activities not only have caused serious loss of state assets, and trespassed on the interests of company, creditors as well as small and medium shareholders, but also have hampered the progress of reform about state-owned enterprises. Therefore, the article tries to analyze and study the rent-seeking behavior in the progress of MBO with The Rent-Seeking Theory, so as to find some ways to hold back the MBO rent-seeking behavior in our country. Firstly, the paper introduces the rent-seeking theory, MBO theory, institutional economics theory, and property rights theory. And then, based on the theory, the paper discusses the performance of rent-seeking behavior about MBO in China from three dimensions of rent-seeking behavior before MBO, rent-seeking behavior in MBO and rent-seeking after MBO. Thirdly, the paper selects some typical cases about MBO to do case analysis on the rent-seeking behavior which the management do loss to enterprises before MBO, the rent-seeking behavior of complicity between the management and the local officials as well as about the progress of pricing in MBO, the rent-seeking behavior which the management carry out high draw dividends after MBO. Finally, the article analyzes the causes of the the rent-seeking behavior about MBO in our country from the deficiency of our economic system, the mechanisms of pricing about MBO, financing systems, the mechanisms of monitoring and punishing, disclosure system, as well as the absence of the owner about state-owned enterprises, the lack of laws and regulations about MBO and the driving of economic interests. And on this basis, this paper proposes the strategies that we should examine the main body qualifications of MBO strictly, perfect laws and regulations about MBO, establish the market-oriented pricing mechanism, broaden the financing channels of MBO, improve disclosure system, strengthen the supervision of MBO corporation, speed up the pace of establishing modern market economy system and establish the ideology of anti-rent-seeking so as to curb the existing rent-seeking behavior of MBO.