| Private small-and-middle enterprises contribute greatly to the economy, the government’s attitude is clear about the private SMEs’future, not only restate "the two never hesitations", but also propose to develop SEMs vigorously. The status and functions of private-run SMEs will be strengthened.However, for deep-rooted historical and institutional reasons, these SMEs stay at an inferior position for a long time. They have some obvious shortcomings in terms of assets and financials, especially in corporate governance. Centralization and relations embody the particularity of SMEs’corporate governance, but these characteristics do harm to firm’s long-run development. In case of asymmetric information and multi-stakeholders, it’s not balance between rights and interests for entrepreneur, and they do things based on the max of union interests, instead of the max of firm interests, which will make inroads on the interests of small shareholders.Private equity institutions reduce the capitals constraint of the target firm, and further, they play a positive role in the perfection of corporate governance. Based on these points, I start my thesis by using review research, game theory model and case analysis.In the literature review, my work begins in term of private SMEs, private equity, corporate governance and correlation analysis. Firstly, after review the function and status of private firms, it inferred the necessary of corporate governance; secondly, it describes "relationship governance", which characterized the private firms, and relationship governance can be seen as start-point to exploring corporate governance; thirdly, it studies relative information about private equity, including development and effect factors, agency problems and exit problem; fourthly, it studies researches about correlation analysis as a reference for my own work.Then we focus on the private SMEs and analysis it’s status of governance, we defer that as the management resource in private-run SMEs is centralized and closed, it’s not balance between rights and responsibilities of entrepreneurs. This imbalance push entrepreneurs to make some decisions about related transactions, then benefits of small stakeholders will be damaged.Then following the description of private equity, we can infer that:there’re surprisingly large overlap between the PE and private firms. In addition, PE has the forward tendency of investment period, and they focus more on targets in seeds and so more on corporate governance.Before we start the correlation analysis, we should definite the reason PE volunteered to help the governance of target firm, double principal-agent relationship can be a proper answer. The relation between investor and fund manager is the root cause, and relation between "negative" PE and firm is only immediate reason. We add conditions of PE, punishment mechanism and system of board successively, and get some useful conclusions:the effectiveness of punishment mechanism depends on its’cost, when the punishments can be neglected, related deals still remains. Board system may be a positive method, it makes the decision procedures open, more stakeholders take part in it and then benefits can be insured.At last, we should state explicitly that PE is not angel for firms ever and forever, they do things according to their own interests, not the firm’s. It’s certainly not wise to commit the firm to PE.For this thesis, the highpoint is that relationship governance is added to the game model as a variable. But for the convenience of model analysis, we simply the complex relations of firms and PE, we also take related deals as representative of imperfect corporate governance. |
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