The Research Of Listed Companies’ Management Buy-out Behavior Based On Financial Effect Analysis

As an important means of capital operation in the capital market, Management buy-outcan not only improve the capital structure, optimize the internal resources, but also can reducethe agency costs of the company management. Today, the management buy-out plays anincreasingly important role in the western developed capital markets. In recent years, with thedevelopment of the reform in the state-owned enterprises, management buy-out has beendeveloping rapidly. However, compared with developed countries, China’s capital market isnot mature enough, laws and regulations is not perfect, and financing channels are sonarrow.All of the problems are exist in our country, which can result in un-standardizedactions during the during the management buyout process. Therefore, it is important to dofurther research on this topic. In this paper, we will address the following solutions from thefinancial effects based on the research of the management buy-out.First, a survey on the background of the management buy-outs is given followed by thetheoretical background and the purposes of our research.We also review some previous workon the management buy-out. This paper focuses on the financial effect of management buy-outs, in the hope of bringing new ideas to standardize the actions of management buy-outs oflisted companies in China.Second, we summarizes the influence which from the MBO to the listed company in therespect of the financial affairs. Based on the summary we choose some listed companieswhich embarked on MBO from2005to late in20011in order to analyze the change ofenterprises’ operating efficiency after MBO by relevant financial indices. Above researchreflects the problem is existing during the process of the management buyouts of listedcompanies, which is in terms of the financial effect in China.Last we come to the conclusionthat management buyouts of listed companies in China need to be further regulated.Finally, Considering the actual situation of the listed company in our country, we fromthe view of financial effect put forward some suggestions in order to standardize the action ofManagement buy-outs in China.