An Analysis Of Causes, Effect And Risks About Network M&A

Today the network economy is developing at a high speed, so the network M&A becomes the focus of attention to most people. Because there are different characters between the network company and traditional company, we have some new topics which are based on these characters to do our research. The author studies mainly on the M&A activities which are caused by the network firms in the network economy. From the angle of Western Economics and New Institution Economics, the author conducts the causes, effect and risks of network merger through analyzing the characteristics of network externalities and generalizing the types of network M&A. In the third part of the paper the author firstly analyzes the macro motivations of network M&A that is the macro-background for network enterprises and then analyzes the micro motivations that is based on characteristics of network firms. In this part the author combines macro economy background with the reasons for the development of enterprise itself, which is a major bright spot. The fourth part the author uses many cases and Game Theory to analysis the effect of M&A. The author draws the conclusions that there will be good effect on economics of scale, synergies and enterprise can reduce transactions costs after M&A. At last, the author comes to the conclusion that there will be more challenges for the development of the network firms in the network economy and it will be disaster for the network firms if they do not estimate risks or properly guard against risks of the enterprise. In this part the author concerns not only effect but also risks causing by network M&A and then uses a variety of analysis methods, which is another major bright spot. At the same time there is also insufficiency in this article. Because network M&A is closely in relation to network economy and information technology, we can do more research about network M&A by combining these three fields .We should do more research about the second high tide time of the network M&A, because we use less cases and data in this paper.