A Study On The Internal Privatization Of The Small And Medium-sized State-owned Enterprises

In China, the ownership reform of the state-owned enterprise(SOE) is called gaizhi. As ownership reform is deepening in the small and medium-sized SOE in China after 1999, there is a popular model of enterprise's ownership reform, which is called internal privatization gaizhi in this thesis. The internal privatization gaizhi's operation method is as follow. First the effective asset in the small and medium-sized SOE is used to posit the SOE's employees, the SOE pay off the debt owe to the employees'salary, pension, fee-for-service, unemployed insurance. The SOE pay the employees compensations for rescinding the employment contract with the employees. Second the part of employees set up a new company with the compensations, in which the management holds the major share. The new company buys the part of effective asset, thus the part of assets and employees in the SOE form a new company. This internal privatization gaizhi is formally similar with the management and employee buyout (MEBO) in the western developed market, and likes the internal privatization in the radical transition economy. But the guide idea and operation method in the internal privatization reform is distinguished from them. The internal privatization gaizhi has its particular characteristic. The study on the internal privatization gaizhi is meaningful. On the one hand, it can help us understand the cause and effect of the gaizhi, and help the policy-makers rectify the policy. On the other hand, the study on the intenal privatization gaizhi in China can enrich the transition economy theory. The study on the intenal privatization gaizhi is concerned with many subjects and it is complex. The main research contents in the paper are limited within three parts as follow:the internal privatization gaizhi's operation methode and it's characters, the cause of it's formation, it's influence on the employee-owner's psychology and behavior. In the first part, for studying on the Internal privatization gaizhi in China, this thesis presents its characters and it's operation procedure. In order to make it clear, the thesis respectively compares it with the MEBO in the western capital market and the internal privatization in the Eastern Europe socialistic states. In the second part, the paper adopts longitudinal and horizontal study on the internal privatization gaizhi's cause of formation, and illustrates the inevitability of the internal privatizatuon gaizhi. In the longitudinal study, the paper argues that the internal privatization gaizhi is evolve from the employee sharing ownership, and it presents the evolutive process of the theoretic base and operation method. In the horizontal study, on the one hand, the paper analyzes the equilibrium process of the interest among the stakeholder through a case study. The stakeholder includes the govement, the employees, the management, the main creditor (the state-owned bank) etc. Focusing on the key issue, the paper introduces the barging process. On the other hands, in order to answer the question why the internal privatization gaizhi is implemented in the SOEs of which the total debt is more than total asset, the thesis analyzes the protection of intangible capital in the internal privatization gaizhi, and illustrates the internal privatization gaizhi's social and economic significance. The thesis argues that the protection of intangible capital is composed of the firm-specific human capital, the corporate organization capital and the corporate social capital. And it argues that the three intangible capitals compose the goodwill. For studing the effects of internal privatization gaizhi, the paper analyzes the motivation's change of the employee sharing ownership and the employee-owners'psychologic and behavioral changes. With the limited information, in the sixth chapter, taking five reformed state-owned enterprises as example and utilizing the grey target theory this paper analyses the motivations of the employees sharing ownership. The result shows that the chief motivation of the employees sharing ownership is for investment gain, and the subordinate motivation is for a secure job. In the seventh chapter, this thesis presents the theory of psychological ownership, which provides us a within-individual explanation for the performance and productivity effects of employee ownership in China. Using the research way of the behavioral economics, this thesis presents a model explaining the change of the employee-owner's psychology and behaviors based on the psychological ownership theory. Taking the transformed state-owned enterprise that implemented employee stock ownership as sample, the thesis examines the change of the employee-owner's psychology and behaviors, and tests the mediating effects of psychological ownership between the objective ownership and the employees'ownership behaviors.