Research On The Economic Consequences Of LOES Control Rights Competition

The "14th Five-Year Plan" clearly states that it is necessary to promote the high-quality development of China’s capital market.However,in recent years,there have been frequent incidents of control competition in China’s capital market.According to statistics,in 2022,a total of 188 changes of control occurred in China’s A-share market,of which 108 were private enterprises,and the main forces of buyers and sellers were also private enterprises.A reasonable struggle for control can improve corporate governance and enhance corporate performance,thereby bringing positive market effects.However,some control struggles have had greater negative effects,which may lead to a decline in corporate governance efficiency and chaotic implementation of strategies,thereby affecting the interests of capital market investors.Therefore,it is of great significance to understand what economic consequences the struggle for control will bring and how these economic consequences arise,so as to control and prevent improper behavior in the process of the struggle for control,which is of great significance to the healthy development of China’s private economy and even the entire capital market.Based on the above background,this paper selects the control struggle of Hengtai Aipu as a case study to study the economic consequences of it.First of all,analyzing the reasons for the outbreak of contention,it is found that Hengtai Ep’s decentralized equity structure and sluggish stock price make Shuosheng Technology try to obtain its high-quality resources and realize control benefits at a lower cost,and the inconsistency of the interests of the two parties has triggered a fierce control struggle.Then,using the event research method and comparative analysis method to analyze the economic consequences of control struggle,it is found that: in terms of corporate governance,the originally too decentralized equity structure tends to be concentrated,and the enthusiasm of small and medium-sized shareholders to participate in corporate governance has also increased,but the efficiency of governance and information disclosure have declined.Horizontal and vertical comparisons of financial indicators show that their financial performance has been negatively affected by different magnitudes;In terms of market reaction,share price movements and excess yields showed that the company’s struggle for control had led to a decline in investor confidence.In short,the economic consequences of the control struggle for Hengtai Epp are basically negative.Finally,from the perspective of optimizing the control struggle process and promoting the healthy development of the capital market,the case brings the following enlightenment: enterprises should improve the company’s internal governance mechanism,and can set reasonable anti-takeover clauses in the articles of association to avoid hostile takeovers;The regulator may establish a control dispute mediation mechanism to promote reconciliation between the two parties as much as possible,and at the same time strictly manage information disclosure issues by improving laws and regulations in advance,increasing law enforcement legislation after the fact,and using public opinion supervision.