An Empirical Research On The Target Companies' Characteristics Of Foreign Capital's M&A In China's Capital Market

Under the new situation of economic globalization, cross-border Merger and Acquisition (M&A) has emerged as the main approach of Foreign Direct Investment (FDI), which is the new trend in the flow of foreign capitals in recent years. Since 1990s, there has been more and more popularity among Foreign Capitals' M&A along with the increasing of the FDI in China. After China's entry into WTO, a series of statute has been established to standardize and encourage FDI. Thereby, Foreign Capitals' M&A of domestic listed companies has become a pop topic in the economy. In the fierce wave of M&A, to research the behavior of Foreign Capitals' M&A in China's capital market is of great significance to make good use of foreign capital, and improve the value of enterprise and the development of China's capital market, even to the development of China's national industry.This thesis tries to make a study of target companies of Foreign Capitals' M&A in China's capital market on the basis of non-financial characteristics and financial characteristics.The statistic analysis of non-financial characteristics show: (a) the target companies mainly occur in the manufacturing industry, and gradually spread in the other industries, such as traffic carrying trade, financing, real estate and so on; (b) the main pattern of M&A is to purchase stockholders' equities of target companies. At the same time, increasing the capitals and equities also becomes one of the mainstream patterns; (c) the area of M&A appears from the eastern part to middle and western parts.The empirical research of financial characteristics indicate: (a) some theories in the developed capital market is not suitable for China capital market, for example, financial leverage and scale theories can't apply in China; (b) profitability, liquidity, debt management, growth and valuation are the determinant characteristics for the choices of target company; (c) the model correctly classifies 68.4% of the foreign targets. On the basis of empirical results, the study also makes a number of significant contributions to the companies to select strategies and to the governments to institute relative industrial policies and supervise the company's behaviors: to enhance the industry policies of Foreign Capitals' M&A of domestic listed companies p; to improve Anti-monopoly Regulations of Foreign Capitals' M&A of domestic listed companies; to advance information disclosure system; to develop the market mechanism of Foreign Capitals' M&A and domestic enterprises.