Study On Motivation, Trend And Performance Of Chinese Industry Consolidation

During the period of the 12 th Five-Year Plan, industry consolidation has already become the keyword for de velopment of multiple industries as an important means of driving industry transformation and upgrading. Industry consolidation is a double-level concept. From the medium level, it is the process of optimizing resource allocation, improving industrial competitiveness and realizing industry optimization and upgrading according to the industry development law in the process of industry evolution. From the micro- level, it is a choice for enterprise strategy in the process of industry evolution and integration for various enterprise resources, mainly reflected in M&A activities. N umerous M&A activities in the industry finally form the tide of industrial consolidation. By starting from industry consolidation at micro-level, this paper defines the boundary of different industrial integration modes in detail, summarizes the characteristics, and analyzes the formation mechanism and motivation. Based on this, the paper explores characteristics and development tendency of industry consolidation in our country by combining with statistical data of research institutions. Besides, data envelopment analysis method(DEA) is used to make an in-depth discussion about performance and influence factors of industrial integration in China at this stage through empirical researches on relevant financial data of C hinese listed enterprises from 2007 to 2013. Many significant conclusions are gained:(1) According to the organization characters, industry consolidation can be divided into horizontal consolidation, vertical consolidation and hybrid consolidation. By utilizing the value module chart of production flow, detailed and effective judgment can be made for the boundary of different consolidation modes. industry consolidation activities of different modes present different industrial organization characters, and the motivation is also diversified.(2) Industry consolidation in China tends to be marketized, cross-regional and transnational; besides, it cannot be separated from industry development strategy of the country. Industry co nsolidation is realized by relying on the capital platform of M&A market gradually. M&A activity dominated by listed companies has already become the major route and mainstream mode of industry consolidation at present. M&A of traditional industries is stable while M&A of emerging industries becomes very active. Longitudinal industry chain consolidation will become an important direction of Chinese industry development.(3) According to the empirical research on performance of industry consolidation activity at micro-level, after consolidation happens, performance level of listed companies is obviously increased. As per the industrial organization characters, performance of hybrid consolidation is higher than that of horizontal consolidation and vertical consolidation. However, from the long run, performance improvement of horizontal integration is more optimistic. According to the industry development cycle, consolidation performance of listed companies in mature industries and growing industries is better t han that of listed companies in declining industries. From the perspective of different industries, industrial distribution of consolidation activity is very concentrated. Listed companies in manufacturing industry occupy the highest proportion, and there is a difference among various industries in integration performance. The performance in financial industry, scientific research industry and technical service industry is better. From the angle of whether the consolidation activity is cross-regional and transnational, performance of consolidation activity within the same jurisdiction is better, and performance of cross-regional and transnational consolidation possesses higher fluctuation. According to the transaction scale of consolidation activity, large-scale integration can obviously improve the performance in a short term. However, in a long term, the overall performance of small-scale integration is better. From the aspect of affiliated transaction, the difference between affiliated transaction consolidation and non-affiliated transaction consolidation in performance does not present significance in a statistical sense within the research period.