Empirical Study On Performance Of Foreign M&As Of China's Listed Companies

Since 1995,there are more and more transnational mergers and acquisitions. The transnational M&A has grown worldwide and become one major mode of FDI. With China's entry into WTO and loosening policies on foreign M&As, there are more and more foreign M&As and this phenomena has become one hot issue of China's security market. But, does foreign M&As really improve the performances of target companies? For this purpose, this paper makes the empirical study on performance of foreign M&As of China's listed companies.Based on a group of financial indexes, which show the performance of listed company, this paper employs the principal component analysis of factor analysis and makes the empirical study on the performance of foreign M&As of China's listed companies. The result shows that the performance of the first year after the M&As become worse than the previous year, while the performance of the second year has grown better than the previous year. Moreover, this paper studies the impacts of different modes of M&As on the target companies. The result shows the performance of target companies with horizontal M&As grows better significantly in the second year after M&A than the previous year, while the performance with vertical M&As gets better in the first year after M&As and then gets a little worse in the second year.Finally, based on the analysis of empirical study, this paper puts forward a series of measures and suggestions such as transforming the government's function, improving the legal systems of China corporate M&As and how to deal with the foreign M&As for the listed companies.