Research On The Value Creation Of The Transfer For Corporate Control Of Chinese Listed Companies

With the development of Chinese security market, the market forcorporate control right has surged. From the microcosmic views, research onthe value creation of the transfer for corporate control is the basis on whichentrepreneurs and supervisors set down plan, which plays an important role inimproving corporate governance of Chinese listed companies in theory. Thisdissertation is devoted to the research on the theory of Chinese market forcorporate control right of listed companies and its microcosmic behavior, onthe measurement of value creation and application and on the interpretationbased on special Chinese institution. The main works are as follows:1. Because of speculation bubbles response to the transfer for corporatecontrol in security market, the existing literatures in which bubble is regardedincorrectly as value creation overestimate the intrinsic value additions.Findings by duration dependence test indicate that there are significantbubbles in market response to corporate control transfer. Omitting thespeculation bubble, the intrinsic value additions created for the controltransfer is measured correctly by means of behavioral finance. Moreover, theDSSW dynamic expansion model is revised according to market feature. Asound interpretation is given to abnormal market response to the controltransfer.2. This research has examined the market performance of the Chinesemarket for corporate control rights by means of event study methodology.That the change in return series volatility has bad effect on test results isn'tconsidered in existing literatures. Standardized residual methodology in thispaper solves the problem that the change in volatility caused by controltransfer has negative effect on statistical results.3. Unlike simple indirect approaches adopted in existing literature inorder to verify the existence of informed trading and information leakage.Instead, a direct method (Informed Trading Probability) is introduced first tomeasure the severity in Chinese market for corporate control. Bid-ask spreaddecomposition model is introduced first to confirm empirically theinformation leakage. Research on informed trading and information leakagecould be considered as an important supplement to the Chinese informedtrading theory.4. The value of corporate control for Chinese listed company is measuredby means of the price difference between non-current controlling and smallblock state-owned stock equity. Factors that affect non-current share price andthose that determine the value of corporate control of Chinese listedcompanies are discussed.We comprehensively study the market microcosmic behavior that resultsfrom the transfer for corporate control in many aspects such as the changes inprice, cumulative abnormal return, trading volume, informed tradingprobability, the changes in liquidity (bid-ask spread decomposition),speculation bubble and overreaction. All of which are the academic basis onthe Chinese market for corporate control. Findings in this paper are valuablein theory and in practice. Although there are lots of non-current shares, thevalue level of corporate control determined by many factors, is closed to theaverage in world. There are serious informed trading, information leakage andspeculation bubble in the market for corporate control.