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On the use of mergers and acquisitions to establish a circular economy system analysis

Author: MaHuiJing GaoLing From: www.yourpaper.net Posted: 2010-06-04 01:51:07 Read:
Paper Keywords: M & A cycle economic system
Abstract: circular economy for its clean production and resource-saving characteristics of future economic development mode. Circular economy characteristics demand is bound to the system as an important guarantee. At present, the establishment of a circular economy system within the enterprise system is a very important part of. It not only can save the cost of the system, but can also make use of the market mechanism to mobilize enterprises to establish the enthusiasm of the circular economy, corporate mergers and acquisitions is an important way to achieve internalization of the external system, make full use of the advantage of the internal system to establish a recycling economy. National policy guidance, tax incentives and financial subsidies to promote the conduct of this M & A activity.
The traditional model of development in material wealth and GDP growth as the main objective, and thus human economic activity has been followed with high investment, high consumption, high pollution pattern of growth, economic development unsustainability. When the traditional development model is facing enormous challenges, resource conservation and clean production, recycling economy has become an inevitable choice for the future development. Sichuan However, the economic agents to pursue the goal of maximizing their own interests often lead to waste of resources and environmental pollution, institutional constraints and state-of-the-art resource-saving and clean production technology is an important guarantee for the establishment of circular economy.
Mergers and acquisitions internal system to establish an important way of recycling economy
Mergers and acquisitions to create circular economy is to reduce pollution and polluting enterprises or primary use of resources and the secondary use of resources enterprises through mergers and acquisitions combined into one enterprise or group, so as to achieve pollution or to reduce the consumption of resources The purpose, thus contributing to the establishment of the recycling economy. In reality, if the pollution and polluting enterprises are independent of each, no external constraints of the system, the occurrence of pollution is almost an inevitable phenomenon, such as Hebei Baiyangdian due to pollution caused by dead fish incident is a typical example . On 2 March 2006, Hebei Baiyoung lake severely polluted, resulting in a large area of ??dead fish. Preliminary statistics, the economic losses of more than 900 million. Baiyangdian water pollution monitoring and investigation, mainly due to the significant increase in recent years, the city is the county located in the the Baiyangdian upstream region paper industry wastewater emissions. However, if the city is the county paper mills and the Baiyangdian fisheries merged into the probability of occurrence of a business consequences can be greatly reduced or even avoided, in order to achieve the recycling economy. To paper mills and fisheries as examples to illustrate the relationship between the two companies is a typical pollution and pollution caused by the loss. The paper mill is polluting enterprises, pollution caused environmental damage caused in the downstream fisheries losses. If the two entities are independent, easy to form polluting enterprises excessive pollutant emissions, destruction of the ecological environment, not only to be polluting enterprises but also caused huge losses to society. Pollution polluting enterprises merged into one enterprise can avoid the occurrence of such events. This is because the cost of pollution control equipment, but far below the pollution caused by the loss. Mergers and acquisitions, polluting enterprises in order to achieve maximum profit of the combined entity in the market conditions must take the initiative to use Sewerage.
Assuming that the paper industry is a business, fishing grounds is a business, and that the two enterprises under market economy conditions two independent economic entities, in order to maximize profits as their production and operation targets. The two companies profit function for:

Paper mills
Fisheries Y:
The Pz paper prices, Z for the production of pulp and paper mills, C is the cost of paper mills, X is the amount of pollution emitted, dead: the price of fish, Y is the output of the fishing grounds, C: for the fishing grounds of cost.

If the two companies are independent, the river is a shared resource, in order to pursue maximum profits, the mills must choose the amount of pollution discharged to enable them to get the maximum profit level, that is, to make 0 X level (see chart). For the paper mill pollution emissions increase will reduce the unit cost of polluting enterprises, the marginal cost of sewage (MCZ) is greater than 0, the pollution will continue, until the level of the marginal cost of paper mills eventually falls to zero. That is, if the mills are independent, market economy, driven by profit maximization goals, discharge of pollutants into the environment as much as possible is an inevitable result. On the fishing grounds, the presence of pollution will increase its costs directly reduce production and reduce profits, but it can not control the pollution. So, in case there is no external institutional constraints such acts of sewage, the amount of pollution to the maximum. However, the two companies merge, the level of contamination can greatly reduce. After the merger of the two companies, under the conditions of market economy, the combined enterprise driven to maximize profits, the volume of sewage will be reduced to a reasonable level.
enterprise paper mills caused by the discharge of pollutants, the cost savings must be reduced to a non-zero level, ie MCZ and MCY (pollution fisheries determined at the intersection of the marginal cost) the absolute value of level, so that a reasonable level of pollution emissions combined enterprise pollution load. Paper mill emissions of pollutants combined to maximize their profits driven by the goal of the initiative through the internal system managed to reduce to the socially optimal level of pollution load of the combined enterprise will not bring damage to other businesses. The reduction of the economic cycle (ie reduction in pollution emissions) have been achieved. In this way the economical use of resources is also the same reason. If the primary use of resources and secondary resources to take advantage of the business combination, to achieve combined to maximize their profits, companies have the power to R & D or to purchase this equipment recycling resources, in order to achieve the purpose of resource recycling and resource conservation to achieve circular economy. Explained above, we can know that mergers and acquisitions can create a circular economy. In fact, the most important feature of this circular economy is through mergers and acquisitions of high resource consumption on the sewage enterprises and the primary use of resources enterprise supervision and control of the external system is converted into the internal system, the combined companies in order to maximize profits, through the development and implementation of the internal system, to achieve the purpose of reducing pollution and resource conservation.
Second, the use of mergers and acquisitions to establish the institutional advantages of the circular economy
To achieve circular economy, the system of science and technology is an important safeguard, determines the direction of technological progress in both system-oriented, it is more in terms of system is more important. To establish what kind of system of circular economy, this is a question worth exploring. Enterprise-related system can have a system of internal and external systems. Outside the enterprise system means that countries have developed policies and regulations to regulate the behavior of economic agents. Its feasibility for external system set up to achieve circular economy, but these systems often limit the profit maximization behavior, the constraints of the enterprise. This external system for enterprises, failed to comply with the initiative, passive implementation, and even sometimes to evade and destroy the system may under certain conditions, to make the system a mere formality. Hebei Baiyangdian the serious pollution caused by dead fish incident is a typical example. From the foregoing, Baiyangdian water pollution mainly due to the increase in the city is the county paper industry wastewater emissions. In the county environmental protection department has also developed various enterprises external sewage treatment system, however, due to the use of high cost of sewage treatment equipment, reducing corporate profits, most enterprises sewage treatment equipment is not normal operation, there is a serious waste-water treatment snuck problem . According to the survey, the governance of the polluting enterprises in Hebei Province rebound rate of 30%; pollution control in other provinces also face the same dilemma. Due to the current means of monitoring technology is relatively backward, you can not achieve real-time monitoring, which created the opportunity for waste-water treatment to the enterprise. Some of its pollution control equipment is just a decoration, in order to meet the inspection. In order to reduce operating costs and increase corporate profits, companies prefer to take the risk of violation of the system of waste-water treatment, and caused pollution control system exists in name only. However, for the society, the loss is far greater than the increase in the profits of polluting enterprises. After the merger of the two companies, businesses are more pollution brought about by the large losses and small profits, there is no external control system, also bound to take the measures to prevent water pollution.
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