Empirical Research On Impact Of M&A Activities Of Listed Chinese Companies On Performance Of Acquired Companies

In the modern economy system, the fittest survive, the discomfort is eliminated.The pattern of the world economy is gradually heated up, the world-wide competition isincreasing, the economic rivalry is conducting between countries, the economic contestis not far behind between enterprises within countries, and they overtake each other andcompete for dominance. In this environment, enterprises have to seek for rapiddevelopment: on the one hand, they can avoid being swallowed up by others; on theother hand, they also can let themselves have enough strength to merger others toexpand their scales. There are three ways to expand rapidly for enterprises: internaldevelopment, M&A strategy, joint development and strategic alliance, among which theM&A strategy is the most important way.In recent years, Chinese scholars’ research on mergers and acquisitions has becomea hot spot and reached some achievements. However, compared with foreign researches,there are still many problems to be solved on the aspects of theoretical research andactual operation. We summarize the results of previous studies and find some defects:first, research perspective: most people conduct the study from the perspective ofshort-term or long-term, and do not examine the substantive changes of enterpriseperformance in two ways; second, research methods: The most common methods indomestic research are the event-study method and accounting-study method, and theregression analysis hasn’t been used; third, the object of study: in the previous analysisof the M&A performance, the sample is relatively small: some scholars only selectseveral sample firms, some scholars select dozens of sample firms. The slight samplesize makes the research conclusion not convincing.It is because of the shortcomings in previous researches that we get a researchopportunity. In this paper, we treat the changes of performance of mergers andacquisitions as the research object. First, we analyze five M&A motivation theories,which will serve as the support and foundation of the theory. Next, we introduce threekinds of methods adopted in this research, they are event-study methodology,accounting-study methodology and regression analysis. And we elaborate on their models and principles. Then we conduct the short-term and long-term empirical analysisand related statistical tests based on the data of the132sample firms of2008. Finally,we discuss the conclusions in detail. We point out the limitations and the prospects forfuture research. The results show that: first, short-term empirical conclusions: mergerand acquisition activity brings the cumulative average excess returns significant rate of1.34%for the acquisition of enterprise, which indicates that merger activity increasesshort-term performance of acquirers and create value for the company to a certain extent.Second, long-term empirical conclusions (longitudinal comparison): the long-termperformance of the acquired business has not been significantly impr loRnOg-Ete rams etmhep irciocrapl ocroatnec lupseirofnosrm (ahnocriez ocnhtaaln gceosm paanrdis odno): rwege reussseionTobino′sv eQd,. TRhOirAd,,dependent variable. The results show that: regression coefficientsof M&anAal vyasirsia balse s tdhoenot pass the significance test; it suggests that there is no significant correlation betweenthe M&A activities and corporate performance changes.The conclusions of this research has enriched and developed the five motivationtheories of enterprise mergers and acquisitions, which has enhanced persuasion andvitality of the five motivation theories, which is the theoretical meaning of this study;the revelation of the studies put forward constructive proposals for the implementationof mergers and acquisitions of listed companies in China, and they also provide a strongguarantee for the development and improvement of China’s capital market, which is thepractical meaning of this study.