An Study On The Wealth Effect And Determinants Of Foreign Mergers And Acquisitions Of Domestic Listed Companies

Since the mid-term of 1990s, with the starting of global transitational Mergers and Acqusitions (M&A) waves and the progressive perfecting of domestic foreign capital policy environment, in rencent years,the M&A of listed copration by foreign capital developed rapidly,which brought important influence to our country's economy.So it is meaningful to take up the task under the stuation.This paper systematically analyses the foreign capital M&A the Chinese listed companies from the theoretical and emprical point of view.In theoretical analysis,we make use of the Western Cross-border M&A Micro-Motivation Theory and International FDI Theory to analyze the motives of M&A. We extend the definition of the wealth effect from the broad and narrow aspects, then we bring foward four factors which affect the wealth effects of foreign M&A.In the empirical analysis , we selecte all the cases of foreign M&A from 1995 to 2008, and do empirical analysis on the wealth effects both the short-term and long-term periods. In the short term, we mainly use the event-analysing method, the results show that M&A activities do give a significant wealth effects to shareholders.For the long-term study,the paper adopts accouting method,factor-analysing and Wilocxon rank and testing, to comparative analyse the assets management capabilities, profitability, capital structure and debt paying ability of listed companies before and after M&A. Results show that, during the 5years of selected study period, financial index of China's listed company have dropped from two years ago from the year of the merger,it improved significantly until after the second year of the M&A. Therefore, the current foreign M&A will bring considerable wealth increase to shareholders and improve the financial performance to the corporation.Next, the paper uses Non-Parametric test Methodology to analyse these stylebooks,in order to research the influence the four factors have on wealth effectiveness of the listed companies.Finally,on basis of the research, we obtain some useful conclusions, then we offer some corrsponding policy suggestions and strategy advices handled by listed companies.