Research On The Impact Of Government Intervention Over State-owned Enterprises’ Performance Of M&A In The Perspective Of Corporate Life Cycles

In recent years, the number and size of M&A on China’s capital market is on the rise. Theoretical study of mergers and acquisitions also gradually in-depth, but the research on the effects of mergers and acquisitions on corporate performance always didn’t get consistent results. Tell from the external environment, under the special institutional background in China, most listed companies in our country are controlled by the government, institutional environment and government intervention differences in government intervention is likely to be the cause of the M&A performance has not obtained unanimous conclusion research. Tell from the enterprise itself, the enterprises own different conditions due to different life cycle, that may also impact on M&A performance differences.Based on this, this paper tries to base on its basic national conditions that government intervention has widespread impact in market economy, take the perspective of enterprise life cycle as a breakthrough point, and the state-owned enterprises’M&A events as the research object. This paper try to answer the following questions:Whether government intervention has influence on state-owned enterprises’merger and acquisition? Whether the state-owned enterprises in different life cycle bear the direction and degree of government intervention are different? Further replies, whether in different enterprise life cycle, the central control enterprises and local control enterprises bear different government intervention?The above three problems corresponding to the three research hypotheses of this paper, to prove this hypothesis, the author use state-owned enterprises M&A events in2008-2009as the empirical research samples, adopted event study methods financial index method^factor analysis method to support the empirical research. In this paper, we apply event study method to evaluate the short-term performance of mergers and acquisitions> financial index method research the long-term performance of M&A and factor analysis method for the stability test. Finally get the following conclusion:First, based on all samples in the window period of (5,5)n (3,3)n (1,1), the cumulative excess return (CAR) is as explained variable, regression of short-term M&A performance; the return on equity (ROE) is as explained variable, regression of long-term M&A performance, proves that the government intervention has impact in the performance of state-owned enterprises M&A. Secondly, according to the regression of grouping samples, found that for the companies in growth period, government intervention has a negative effect on M&A performance, but the central control companies are better than the local control enterprises; government intervention has a positive effect on M&A performance during ripening period, and the local control enterprises’ positive impact is much bigger than that of central control ones; In a recession, the government intervention has a positive effect on short-term M&A performance, but have a negative impact for a long time, also the central control companies M&A performance is better than the local control enterprises.At the end of this article, combined with the actual situation in our country and the research conclusion in this paper, put forward to some policy Suggestions, as optimize state-owned listed companies’M&A performances correctly guide the government interventions improve the recognition of the importance of state-owned enterprises’characteristics in every life cycle and use these characteristics correctly.The theoretical significance of this study is to introduce the concept and theory of enterprise life cycle to M&A performance study, put forward the impact of different characteristics of various life cycle enterprise to M&A performance as well as the importance of this impact, what is more, it put forward the important role the different characteristics of various life cycle enterprise act in other factors ’impact on M&A performance. For later studies, this paper find a new starting point. Further research can be on different enterprises life cycle characteristics’ direct impact on the performance of mergers and acquisitions, also can research on the enterprise life cycle’role in other factors’impact on M&A performance. Realistic significance lies in that, this paper hopes that the government intervention can pay attention to the state-owned enterprise’s stage of life cycle and the characteristics of the stage, so that more companies can manage their own conditions of mergers and acquisitions and can create value for the enterprises.