An Empirical Study On The Impact Of Institutional Factors On The Performance Of Cross - Border M & A Of Chinese Enterprises

With the favorable conditions of Chinese government promoting mergers and acquisitions and "going out" strategy, the pace of Chinese enterprises’ overseas M&A is accelerating. However, past experience has shown that the main reason for most of the overseas M&A failures was poor integration. Study on how to effectively integrate is of great significance for both the enterprises and the government.This paper devotes to measure enterprise performance with the effect of integration, combined with theories of merger and acquisition, merger performance, institutional factors. After summarizing relevant literature, the influence to enterprise merger performance from internal enterprise institution factors which characterized by organization structure and equity ownership and external macroscopic enterprise institution factors which characterized by the political, cultural, economic institution is analyzed.Based on the summary of relevant theories and literatures, this paper selects 89 samples of Chinese enterprises’M&A which had debuted their IPO in Shanghai, Shenzhen or Hongkong. Then, use accounting indexes approach and principal component analysis method to build the enterprise M&A performance index system. Selcet the number of top management turnover (CEO), the government governance (WGI), geographic distance (DIS) and the index of economic freedom (IEF) as the representative variables of institution respectively and the numbers of M&A (MAA) as control variable. By using of binary discrete regression, this paper builds models to conduct empirical analysis. The results are as follows:the reform of organization produces negative impact on the increasing of enterprise performance; the economic institution do not produce significant influence on enterprises’performance; cultural distance and the political institution have positive effect on the improvement of enterprise performance; different kind of equity ownership produce different influence on performance. The empirical result based on the sample of state-owned enterprises is similar to that of the whole sample. While the result tested on the sample of private enterprises is different:only the index of economic freedom (IEF) shows significantly negative impact on the increasing of enterprise performance. Then, this paper selects the VSM index as the representative variable of cultural distance for the robustness test. The results show that the model has certain robustness. Based on the regression explaining with taking the current situation in our country enterprise mergers and acquisitions into consideration, the conclusion section provides some suggestion about the enterprise integration strategy in the perspective of the enterprises and government respectively.