| Since the separation of ownership and control power began, more and more people become aware of the problem of corporate governance which can be solved only by the formation of certain mechanisms. There are internal and external governance mechanisms, the latter of which functions in the form of corporate control market. In such market, when a hunting company recognizes the target company, it will start the protocol of transferences of corporate control in five ways which contain merger and acquisition, agency competition, equity trust, free transfer and Judicial decisions. As for the corporate control market, in the perspective of mainstream theory, only merger and acquisition is effective among the five ways of external governance, while internal governance mechanism is of no use. There are three ways to complete merger and acquisition, such as signing agreement, offering and obtaining stock of the target company without acknowledging the managers. But nearly all of the nations make a rule that it is compulsory for the hunting company to prepare an offer to the target company when the stock harvested reaches a certain degree, which makes it impossible to carry out the third method of M&A.There are significant differences between control markets of China and highly developed market economies. The market in our nation is less perfect and dynamic compared with the counterpart of west countries.Since the very reason of developing capital market of China is to facilitate the financing of stated-owned companies, state unit nearly exist in all the listed companies with a high ratio of the whole stock. Meanwhile collective ownership stake become legal person shares today. In concern of losing stated-owned property, stated-owned shares and legal person shares are forbidden to circulate in capital market of China, which means what public is transacting is only the individual stocks. The stock in China is divided into tradable shares and non-tradable shares, which creates the phenomenon that the same share enjoys different right. The largest shareholder in a great number of listed companies is the state, while the stated-owned share is immune from the circulation in the capital market. This implies such a ridiculous reality that one can not reach the objective of completing the transference of corporate control by means of buying individual stocks in the capital market. Obviously this will be a great hurdle in the process of capital market development. The efficient function of control market is on the basis of the effectiveness of the capital market. But the share that is in circulation only occupy a relatively small part of the whole share, which weakens the function of control market to upgrade the performance of the company by optimizing the corporate government.Since share reform began, the exact plans of listed companies have been approved, and more and more listed companies have stepped out of the"lock period". A new era of complete circulation has come. Though some of the stated-owned and legal person share will remain"locked", and not yet be able to circulate, which is the reason why a lot of people regard such a period as a transition time, there are definitely significant differences that is happening. In such a transition time, it seems meaningful to study whether control market can upgrade the performance of the company by optimizing the corporate government. In the ground of post-share-reform era of China, we carry out the empirical research on the effect of transferences of corporate control to the company value. By analyzing the data, we try to figure out whether the outcome in this transition time is the same with the result that is harvested before the share reform, so as to offer some material and data for the research that is coming. Meanwhile, we try to find out the factors that are in positive correlation with CAR during M&A. Such factors include whether managers hold shares, whether chairman of the board is also the general manager, whether turnover of managers occur during M&A, whether nation of the share change.After the empirical study on the chosen listed target companies that complete transferences of corporate control by means of M&A during the year of 2005 to 2008, we find out that M&A can bring target companies positive abnormal return, which is in correspondence with the result of scholars abroad. Though it is in line with the outcome of Chinese scholars also, as the study is carried out in the ground of post-reform-era when the capital market of China is more effective, the result of this paper is definitely more convincing.Meanwhile, we also find out that the message of M&A is leaked to public long before the official notice date in 2005, but such condition doesn't exist in 2006 and 2007, while it recurred in 2008. After analyzing of the four consecutive years, we draw a conclusion that the capital market of China is becoming regular and orderly gradually, though the process may undergo a tough and tortuous path toward the finally goal of a highly developed capital market. On the momentum of the share reform policy, the capital market of China will be mature as day goes on, and transform into a real healthy one.Besides, we study the factors that may influence CAR during the transference of corporate control. In our study, we find out that whether managers hold shares and whether the nature of the share will change is in positive correlation with CAR with significance at the 0.05 and 0.1 levels respectively, which prove the hypothesis of 1 and 4. That is the companies the managers of which hold shares will get higher abnormal return during transference of corporate control, and the increasing of the ratio of stated-owned share after transference will render company higher abnormal return. While neither company size nor liabilities seem to have anything to do with CAR. To our surprise, whether chairman of board is also the general manage is not supported by the significant test, we think it may because whether chairman of board and general manager is one people doesn't play an important role in the whole corporate government, so will not impact the value of company. Whether the turnover of mangers occurs during M&A doesn't have an impact on the CAR. The reason may be that the new managers fail to undertake the task of upgrading the efficiency of the company, while public don't pay enough attention to the information either. |
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