The Motivations And Consequences Of Nationalization Of Private Enterprises

Since 2013,the state has introduced a number of policies to actively promote mixed ownership reform in the manner of the privatization of state-owned enterprises and the nationalization of private enterprises.In general,state-owned enterprises have advantages in competition because of their mature platforms,brands,technologies,channels and strong financial strengths.Even if private enterprises generally have disadvantages such as limited market scale,high financing constraints,weak ability to obtain projects and expand the market,the market-oriented operation mechanism gives them strong internal driving force and high operating efficiency.Therefore,it is of great significance to strengthen the cooperation between state-owned capital and private capital,and realize the mutual promotion and common development of all forms of ownership capital.The environmental protection industry has public attributes,which makes state-owned enterprises have obvious advantages,so the nationalization of the environmental protection industry is more prominent.In order to deeply study the nationalization of private enterprises,this paper selects Dongjiang Environment as the research object,analyzes the motivations and consequences of the nationalization of Dongjiang Environment,and then analyzes its problems and shining points.Based on the above analysis,this paper puts forward effective countermeasures for Dongjiang Environment itself,environmental protection industry and other industry to promote mixed ownership reform.Through case study,this paper makes an in-depth study on the nationalization of Dongjiang Environment.Firstly,this paper introduces the basic situation of Dongjiang Environment and GRAM,and introduces the process of the nationalization of Dongjiang Environment.Secondly,this paper analyzes the motivations of the nationalization of Dongjiang Environment and the motivations were as follows: first,the environmental protection industry had a bright future.Second,GRAM wanted to achieve synergy effects.Third,there was a good opportunity for acquisition.Then,this paper analyzes the consequences of the nationalization of Dongjiang Environment from the aspects of operation results,financial position,management effectiveness,etc.Through research,this paper holds that the nationalization effectively promoted the communication between Dongjiang Environment and government departments,and it played a positive role in business expansion,progress of projects and the acquisition of government subsidies.Moreover,the entry of state capital effectively improved the credit rating of Dongjiang Environment,and enriched the financing channels of Dongjiang Environment,so the financing ability of Dongjiang Environment was improved.But the nationalization also resulted in some problems,such as cost control ability was insufficient,equity financing failed many times,shortage of funds still existed,core management team serious brained drain,etc.In order to solve above problems,this paper puts forward the following suggestions.First,encourage the nationalization of private enterprises in specific industries.Second,strengthen the control of period cost.Third,deeply analyze the risk of stock issue.Fourth,rely on the background of state capital to actively cope with the shortage of funds.Fifth,form an effective talent incentive mechanism.Sixth,strengthen the construction of management team.