Study On The Influence Factors Of Investor Reactions To The Listed Companies Mergers And Acquisitions Announcement

::In recent years, mergers and acquisitions(M&A) has become the main mode of allocation of resources in Chinese capital market with the increasing number of M&A events. As the main participants of the capital market, investor’s perception of M&A and the investment behavior have greatly affected on results of M&A. Although the literature is now replete with studies of share price reactions to M&A events, we found the literature about the influence factors of investor reactions to the M&A announcement is not much. In addition, investor reactions to the M&A announcement is not completely objective and rational result in the real world. In fact, in most cases investor are subject to bounded rationality. Their reactions to M&A announcement usually depend on others’perception of an acquisition’s synergistic potential.Based on the traditional finance economic theory and behavioral finance theory, and through researching and discussing systematically the behavioral theory and social psychology theory, this study has discussed on the role that management plays in shaping investor reactions from the perspective of strategic management. On the whole, this study mainly solved the two problems:l)The relationship between investor reactions to M&A announcement and management’s perception;2) the synergistic opportunities between acquirer and target company, the acquirer’s motives of M&A and the acquirer’s ability of M&A whether can adjust the relationship between investor reactions to M&A announcement and management’s perception. For the above two questions, this study relaxes the assumption of investors making objective, rational-deductive calculations. In the review of domestic and foreign related research conclusions and the basis of the theoretical derivation, we also put forward a series of hypothesis. Then, building the research model of investor reactions to M&A announcement. Finally, taking58M&A events over ten years from2003through2012as research sample, this study uses event-study methodology to examine hypothesis, and discusses in detail the deep-seated problems which the empirical results implied. The results shown investor reactions to M&A announcements rarely represent the objective, rational-deductive calculations that financial economists have purported them to be. In contrast, given the information asymmetry investors face, they draw heavily on management’s perception to make investment decisions. Nevertheless, in light of the possibility of cognitive biases and opportunistic behavior on the part of management, our findings suggest that investors do not blindly follow management’s perception, but actively attempt to assess its reliability based on the public information available to them. Based on conclusion, some beneficial reference and reference are provided for managers, which how to maximize the enterprise value and how to manage investor reactions to M&A announcement.