2006 Fiscal Year Final Research Report Summary
A Study on Management Buyout of Chinese Listed Company
| Project/Area Number |
16530170
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Economic policy
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| Research Institution | Hirosaki University |
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Principal Investigator |
HUANG Xiao chun Hirosaki University, Faculty of Humanities, Associate Professor, 人文学部, 助教授 (10234684)
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| Project Period (FY) |
2004 – 2006
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| Keywords | management control / reform of state enterprises / management buyout / ownership reform / loss of state assets |
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| Research Abstract |
The reform of state-owned enterprises is crucial for the Chinese economy. However, but it is not clear that which way is the best for doing it. There are two different approaches, one is that shifting the managerial power to the management while maintaining the state ownership, another one is that abandoning the state ownership to go to the privatization. In case of the privatization of the state owned enterprises, there are two different choices, selling the state assets to market or buying it by management (MBO). MBO is becoming one of the main issues in the reform of the state owned enterprises in recent years and repeated "go and stop "games up to now.
This study examined the policy changes on MBO in China and suggested that the price setting of the corporate assets is not only sensitive, but also difficult. Because management themselves assess the assets and set the sale prices in most MBO cases, it inevitably caused public criticism and lead to government intervention. The case study on Qingtao beer suggested that the management tried to seek other way, for example, organization restructuring and alliance with foreign capital to sift the ownership from government to management.
Contrasting with MBO took place in western countries, stocks hold by management in China are usually less than 50%, as a result, the companies are maintaining the status as a listed company. We need to conduct a follow-up survey on the ownership, management and performance of those MBO companies.
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