An Empirical Study on the Performances of Management Buyouts in Chinese Listed Companies

The paper analyzes the performances for a sample of 44 management buyouts(MBO) of Chinese listed companies completed between 1997 and 2007. We find that MBO, in general, has no significant effect on performances of Chinese listed companies during sample period. After MBO,these companies experience increases in EPS. In the fourth years after the buyout, these companies' net return on assets, main business profit margin are slightly higher. MBO companies' growth ability went down in the second and third year after MBO. In the fourth year after MBO, these companies experience no change in total assets growth rate, slightly decline in main business growth rate,and substantially decline in net profit growth rate. But MBO improved operating efficiency to some degree.