Eva M & A And The Target Enterprise Value Of The Relationship Between Empirical Research

With the development and improvement of capital market in China, more and more enterprises come to the capital market. It leads to an escalating significant influence on effectively configuring resources. It is property right reform and institution innovation based on the capital market that will be important significance to promote enterprise value. In recent years, trades of M&A in the capital market are frequently present in China. It was simply in the Chinese capital that the amount of M&A reached RMB 82.7 billion in 2005, for example. What are the actual effects of these intensive and frequent M&A operations? Do these M&A operations always promote enterprise value? Consequently, it is imperative to investigate the effects of M&A on enterprise performance.On the basis of the investigations on the research situation at home and abroad, from the empirical research point of view, the primary methods with respect to the research on the performance of M&A include event study methods and accounting methods. The event study methods are controversial when they are applied to the Chinese capital market, while the accounting methods, which mainly adopt traditional finance index system, cannot accurately reflect enterprise value because they neglect the cost of capital in business activities. However, Economic Value Added (EVA) method is capable of converting the accounting profits to the real economic profits. Therefore it gives a good solution to the problem of traditional finance index system. It can accurately reflect the value created by the enterprise for the shareholders during a certain period. Hence, the EVA method was adopted in this dissertation. A listed company oriented company in which merging event occurred in 2003 was chosen as a sample to investigate the changes of enterprise value before and after merging through an empirical study. And some conclusions were drawn through this research.The dissertation is divided into the following parts:First of all, the concept of M&A for the listed company is defined. And the current research situation at home and abroad is reviewed according to the different research methods. Then, the categories of M&A in Chinese listed companies are introduced, followed by the introduction of the categories of the M&A incentive theories. It provides the fundamentals for discussion on the empirical study afterwards. In addition, a review and comparison are made regarding the evaluation methods of enterprise value. The EVA method is used in this dissertation. At last, 206 listed company oriented companies that satisfy the conditions are chosen as the sample companies. The rates of economy added value (REVA) in five years are calculated through the revised REVA model. The value changes of the enterprises in five years and the oriented enterprises in different merging categories are investigated. Some statistics methods, such as the descriptive statistics method, paired T-test, were employed to process the data available and to obtain the statistical results. The results were analyzed based on the M&A theories and the situation of Chinese capital market at that time. The empirical study results show that the performances of the enterprises merged in 2003 are improved to a certain extent, but there is no effect in that year (2003) when M&A occurs. The M&A performance is gradually present in the following years, i.e., after 2004 and 2005. However, it drastically falls down in 2006. The main conclusions in this dissertation are that the listed companies can improve their performances through M & A to a certain extent. The effect is remarkable in a short period, but not in a long term. In general, M & A is able to promote the enterprises value. The changes of the enterprise value are dependent upon the different merging categories.