Study On The Shenzhen Stock Exchange Small And Medium Enterprise Management Perspective's Merger Motives And Performance

Since 2004, the Shenzhen Stock Exchange Small and Medium Enterprise Board had been established as a platform to implement the strategy of independent technology innovation and restructuring of the industries in China. With this capital platform, a lot of small and medium enterprises achieved a rapid transformation to large enterprises. Their market area expanded from a regional area to a national area, even to a worldwide area. In this process, by the means of merger and acquisition, the firms achieved a rapid development along with an economic effect. The market data shows SME Board companies enlarged the companies' scale and business lines through asset acquisitions and investments. The promotion effect of listed companies' performance gradually revealed. Most SME companies are private high-tech enterprises or the leaders in the sub-industry, whose behaviors often show different features with the Main Board firms. However, the past literatures, which focused on the relationship of motive and performance of M&A (Mergers&Acquisitions) within the whole Shenzhen Stock Exchange A-stock Board, had rarely study on the SME Board companies separately. Therefore this thesis attempts to research on motive and performance of M&A within SME Board companies in the management perspective. The thesis will divide the motivation, which is in management perspective, into agency costs motivation and overconfidence motivation. Besides, in order to give some useful suggestions to the relevant policy makers, regulators, investors and the managements, this thesis will study what the relationship is among the motivation, decision and performance.First, the thesis introduces the background and significance of this thesis. The second chapter is literatures review, which is divided into two parts. The first part gives a brief state of the domestic and foreign literatures studied on motivation of M&A. While the second part states the domestic and foreign literatures about performance of M&A briefly. The third chapter is the analysis about the Shenzhen Stock Exchange SME board. The historical changes, legal system, market features, and the reason why the author study the theme in management perspective will be described in this chapter. The idea that motivation of M&A is due to agency costs and overconfidence these two essential factors, as well as the relationship between these two factors and M&A performance will be illustrated in Chapter four. The author will use 259 listed companies in SME Board as samples to verify the motivation and performance of M&A in chapter five and six respectively. This thesis comes the conclusion that motive of agency costs has a significant negative correlation with decision-making behavior, and has no significant correlation with performance. And the motive of overconfidence has a significant positive correlation with decision-making behavior, and has no significant correlation with performance. At last, a serious of useful proposals will be provided to regulators, listed companies and investors.