| M&A has played an increasingly outstanding role in China's economy. However, the typical characteristic of M&A in China is that it is not produced by natural evolution of market economy. The Original M&A was driven by both central government and local governments mainly in gratuitous way. With the reform of the old system, the enterprises have come to have the desire to expand. However, the stimulation slack leads to inefficient M&A. The unique approach of M&A such as administration-oriented, administration-market-mixing and M&A on incomplete and invalid securities made by listed companies lead to loss in profit. Then what is the real reason for such inefficiency? How to find a path by which M&A can lead to efficiency improvement? The answers to these questions will undoubtedly be greatly helpful for the strengthening of competitive power of enterprises and realization of the industry restructuring and upgrading.CHAPTER ONE: The logical starting point of this dissertation is what are the sources of efficiency improving brought by M&A? The basic source is the improved efficiency of productive element utilization .It comes from the scale economy, reducing of translation and diversifying operation risk respectively produced by horizontal M&A (involved firms are among the same commodity or service producer in the same markets), vertical M&A (if a firm acquires either a supplier or a customer) and mixed M&A (among the non-relevant businesses).CHAPTER TWO: From the whole social resource allocation level, market -oriented M&A will exert the following four functions by price mechanism: 1. Rectifying the inefficient resource allocation. 2. Accelerating the quitting of declining industry and upgrading industry structure. 3. Market-oriented M&A is not only the material resource allocation mechanism, but also the competitive filter of internal property institution that leads to the evolution toward more efficient institution arrangement. 4. Market-oriented M&A will increase social welfare by free choice and non-gratuitous, fair exchange made between participants. In realization of these functions, the price adjustment mechanism plays an important role.CHAPTER THREE: However, not all M&A can lead to efficiency improvement due to its internal and external constraints. The internal constraint lies in the scale economy and management efficiency along with the decision of M&A based on the analysis of cost-benefit. The external constraint lies in perfect market system that includes competitive product market, efficient entrepreneur market and valid securities market.We can draw a logical conclusion based on the former chapter's analysis: M&A leading to efficiency improvement is the market-oriented one made by rational market subjects under internal limitation. This conclusion can be regarded as a main idea of probe into M&A in China with two perspectives: the one is participants' abnormal motive and behavior, and the other is market environment.CHAPTER FOUR: From a transition of central-planning economy to a market one, China takes it's transition stage .M&A in China is under the situation of gradually decreasing administrative intervention along with the gradually aggrandizing market forces. Under the state-owned property structure, the government that is a political body capable of interfering the economic process according to its objective functions participants in M&A by transferring the assets gratuitously between state-owned enterprises. Meanwhile because of the stimulation slack due to state-owned property structure, "the internal person control of state-owned enterprise" drives the blind M&A and defends the M&A made by other well-operated enterprises. In such cases, M&A is bound to suffer efficiency losses.CHAPTER FIVE: When turning to M&A in security market of China, we will find that the performance of companies that have involved in M&A is not constantly improved. The unique reason is the securities market is invalid. The invalidity caused by incomplete market where the administrative mechanism... |
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