During the past two decades, it was witness a dramatic global shift in economic policy away from state-owned enterprises (SOEs) towards privatization. Since privatization improves incentives, a rapid transfer of ownership and control right should be desirable. In Taiwan, the Executive Yuan of the government organized a group to promote privatization in 1989 and the officers then took the initiative to carry out the privatization program enthusiastically. By classifying the privatization process into two stages, we analyzed the effect of different stock floatation schedules, different underwriting mechanisms, and different levels of government intervention on ownership structure and corporate governance. Based on the model inference, we found that when maximizing stock floating revenue, wider share ownership, and promoting the SOEs¡¦ efficiency, a sequential transfer of ownership and control right should be better than privatized instantaneously. Under the same goals, the mechanism with partial public offering and partial auction was better than the mechanism with partial public offering and partial book building. Finally, it was not optimal for government to intervene the operating of SOEs after privatization.

Abstract There are lots of disadvantages such as the complicated of legal, the inefficiency of decision and the lack of performance. So the government had established ¡§The Privatization Promoting Group for the Executive Yuan of the Republic of China¡¨ in July 1989. The chairman of Council for economic planning and development was the convener. It had made a series of the privatization of stated-owned policy and planned the privatization of stated-owner¡¦s schedule according to different character. Recently stock releasing had already failed. The government, the administration and the employee was dissatisfied with the process of stock releasing. So our study mentioned the design of financial imagination. This design was that led into employee stock ownership plan in the success of the privatization of state-owned and included stock ownership of stock floatation. Both of the close-ended periods were extended to the infinite period. At last our study took an example for Chunghwa Telecom Company and evaluated this design if whether can be executed. My study found that this design could make the employee gain the director number of 1.3 to 2.6. It would enhance efficiently the director number and stabilize the employee ownership. My study expected that it had lots of advantages as follow: (1) Benefit for the privatization of stated-owned (2) Protecting the terms of the employee¡¦s equity (3) Making the employee ownership system (4) Solving the dispute between labor and capital (5) Rational for the stated-wealth¡¦s evaluation (6) Strengthening the corporate governance