Research On The Mechanism And Effect Of Private Enterprises’ Intriducing State Owned Capital For Bailout

Since 2018,more and more state-owned enterprises have responded to the central government’s call for relief for private enterprises in liquidity distress,helping them to ease their financing woes and tide over the equity pledge unwinding crisis.But can the introduction of state-owned capital into private enterprises resolve their liquidity woes? What is the mechanism behind the bailout? This is a question that requires further research.Based on this,this paper uses the example of Hunan Asset Management’s bailout of Truking Technology as an example to explore the mechanism of the introduction of state-owned enterprises bailout by private enterprises and the effect it has had,with a view to providing reference for future bailout actions.The main findings of this paper are as follows: Firstly,the introduction of Hunan Asset Management into Truking Technology can achieve the purpose of relief through the following mechanisms:(1)Hunan Asset Management provides financial support through issuing trust loans,alleviating financing constraints and providing government subsidies to provide financial security for the consolidation of Truking Technology’s resources;(2)After Hunan Capital Management’s shareholding in Truking Technology,the allocation of control is optimized,the interests of each entity are balanced,and the continuity of decision-making is guaranteed while enhancing management effectiveness,which provides governance-level support for the realization of the relief effect;(3)After obtaining the state capital empowerment,Truking Technology integrates internal and external resources,promotes industrial construction,increases R&D,then restores its own blood-making capacity and improves corporate performance,thus affecting the relief effect;(4)Hunan Asset Management protects the results of the bailout by setting reasonable exit methods.Secondly,this paper evaluates the bailout effect from two perspectives: market reaction and enterprise operation.From the perspective of market reaction,the entry of Hunan Asset Management can enable Truking Technology to obtain positive excess returns,and the adoption of a phased exit can reduce the volatility of the share price,and the long-term market value of the enterprise shows an upward trend.In terms of business operation,the state capital bailout has reduced the risk of Truking Technology,strengthened its core competitiveness,improved its financial position and enhanced its enterprise value.Overall,the introduction of Hunan Asset Management Relief to Truking Technology can produce positive results.Thirdly,based on the case study and the findings of the study,the following insights are drawn from this paper:(1)the bailout should be reasonably arranged for the allocation of control,balancing the interests of each subject;(2)private enterprises should take the initiative to improve their own strength and prevent dependence on the bailout;(3)state-owned capital should reasonably set up an exit mechanism to stabilize the results of the bailout.The research in this paper will add to the research on the mechanisms and effects of bailouts and provide some reference for future bailout initiatives.