The Market Reactivity Caused By Transfering Of Corporate Control Right In China

The transformation of corporate control is one of M&A, which means aimed corporate control right transfer to another company, or an company takes over the primary directorate (Jensen&Ruback,1983). Some scholars'conclusions show that corporate control right could bring benefit to its owner., that why there are so many M&A activities like a rising wind and scudding clouds in the world . Simultaneity, because the corporate control market can create value to shareholder, the transfer of corporate control right would also make the benefit, the mechanism is that corporate control market could form exterior threaten to company governor, that may spur they to make great efforts to advance corp. value, or they would be replaced. When the right transferring, some guide lines reflecting stock market exchange like share price will happen to abnormal fluctuation, in which shareholders may gain abnormal income.Based on the studies of precious scholars , this article will use the theoretics of corporate control as a starting point, analyzing sufficiently the actuality,institutional context,market condition ect. of our country's corporate control market, and we'll research if the transfer of corporate control right create the treasure for shareholders and which factors affect the share price. Take the companies of A share market which have transferred the corporate control right since from January 2002 to December 2007 as the foundation, 133 samples are selected. In the Event Study, we find that transfer of corporate control right could create plus abnormal returns, and its CAR is 1.0892, which means every company could gain its CAR of 1.0892 in average. On the side, the information is leaked ahead of schedule since the value of CAR has risen quickly during 10 days of the eve announcement. When detach the data to two groups, the conclusion shows there is difference between them, the data before 2005 has the same results with the collectivity sample, but the CAR of the data after 2005 is far low than the former, just 0.0174.The article also analyze the factors affected the share price, by selecting, five guide lines were picked out, they are style of transfer,ownership structure,industry change,transfer price/step market price,management change. With Multiple Regression, the result of empirical analysis is that only the industry change and management change have the remarkable effect to aimed companies'share price when the transfer of control occur.