Chinese Listed Companies In Vertical Mergers And Acquisitions And Divestitures, Economic Performance

The scale of business has failed to form a unity of knowledge, resulting in the blurred relationship between the scale and economic performance. Zhang Yuanzhi, Ma Mingxiao divided business scope into horizontal scale and vertical scale. The economic scale of expansion of Horizontal scale has been explicitly confirmed at theory research or in the real economy. But vertical scale expansion did not show the same market reaction as horizontal scale expansion does and put forward to the theory conjecture of diseconomies of Vertical Scale.Vertical acquisition and Corporate Divestiture are the opposite corporate strategy. Implementation strategy contributes to that enterprises corporations covered more production process is, it means that the vertical scale become larger. Corporate Divestiture means that the originally belong to the enterprise process is down, as that the vertical scale become smaller. In this paper, we tried to pass the test of a testament to the vertical mergers and corporate divestiture to enterprise brought to the economic performance, from the enterprises merger or divestiture contributes to verify the theory conjecture of diseconomies of Vertical Scale. This article summarizes the vertical mergers and corporate divestiture of the listed company as sample from the year 2000 to 2005, with the relevant financial indicator that refiects a listed company's economic performance and SPSS 16.0 into a testament to the test, vertical to bring enterprises economic performance to drop, divestiture of business economic performance has improved conclusion. In addition, this paper intend to give theory explanation to the diseconomies of Vertical Scale from transaction cost to the enterprise production, business knowledge, modularization of theory and the division of labor. Finally, I made some suggestions from the existing theories proposition on integration of industrial chain, enterprise development strategy, government policy formulation and business growth.