State-controlled Listed Companies Which Control Is Transferred, The Board Of Directors And Operating Performance

In western developed countries, the viewpoint that corporate control market has the function of improving the operating performance has been supported by substantial research evidence. Compared with western developed countries, the degree of marketization of Chinese corporate control market are still very low. During the transition period of Chinese economy, whether the control right transferring of state-controlled listed company has the same function as those in western developed countries? This is a question concerned in the study. In addition, after takeover, the new controlling shareholder will restructure the board of directors so as to control the decision-making of the company's operation. Will the board be substantial restructured, and the different characteristics of the new board, as well as what is the impact on improving the operating performance, these are themes of this study too.This paper is based on the background of Chinese economy transition period. First, the study deduced four research hypotheses by the analysis of theory. Then taking 125 Chinese state-controlled listed companies which have experienced control right transferring during 2002—2003 as research samples, and taking ROE(return on equity) and CROP (profit margins of main business) which have been adjusted by industry-average as the benchmarks of measuring operating performance, and choosing 6 years as the research period, the study used the software of SPSS11.5 to test the four hypotheses, and finally found that:(1) After control right transferring of state-controlled listed companies, the operating performance has been improved. Under public property rights, the control transfer of state-controlled listed companies is efficient, which can promote improving the operating performance. But the degree of improvement showed the trend of decreasing year by year.(2) After control right transferring of state-controlled listed companies, replacement of the chairman of board is better than without replacement in improving the operating performance. The corporate control market itself contains a function that replaces the inefficient chairman of board. After control right transferring, the inefficient chairmen are more easily replaced.(3) After control right transferring of state-controlled listed companies, the company with chairman of board and general manager are different person, or the company with chairman and general manager is one person, they make no difference in improving the operating performance. Nowadays in China, whether chairman and general manager is one person or not, it is not an important factor for improving the operating performance.(4) After control right transferring of state-controlled listed companies, the proportion of independent director in new board made no difference in improving the operating performance. The system of independent director in Chinese failed to play its role to promote improving the operating performance.