Empirical Study On Short-term Performance In Different Methods Of Payment In M&A

With the rapid development of global economy,enterprises are bearing increasingcompetition pressure in the market,and it is becoming more and more difficult to obtaincompetitive advantage.Therefore,enterprise mergers and acquisitions (m&a),as a kind ofenterprise behavior,has become an effective method to achieve rapid expansion,optimizeallocation of resources,achieve benefit in coordination,face the challenge from internationalmarket.However,the acquirer shall pay corresponding price for the mergered to achievem&a.And no matter which method of payment is adopted,it should be depended on concreteproblems,for example,enterprise statue of dealing parties,m&a purpose,capital marketenvironment and so on.Therefore,the method of payment,which is the last link and also thekey link in the deal,has been paid more and more attention in the process of m&a.Themethods of payment even influences the success of m&a and the realization of synergisticeffect and expected performance required by enterprise.Therefore,this article focuses on theempirical study of the short-term performance in different m&a methods of payment and isexpected to act as a guidance and reference for the m&a in Chinese quoted company andguides them to achieve better results.The article systematically combs the related theory about methods of payment in m&aand m&a performance by qualitative methods,and empirically researches the m&aperformance in different methods of payment by quantitative method.It is a method ofcombining with qualitative analysis and quantitative analysis,normative research andempirical research.Among the empirical part,this article adopts event study to empiricallyanalyze the m&a events of manufacturing industry from A-share market of Shanghai andShenzhen in2007-2013.Finally,this article draws the conclusion,measuring the short-termperformance by excess return:The short-term performance in m&a is inequable in differentmethods of payment.The payment of cash which makes a better short-term performance,willbring a significant positive excess returns and increase shareholder value.Stock and assetreplacement,which makes a bad short-term performance,will bring a significant negativeexcess returns and decrease shareholder value.Assumption of debt and mixed payment,whichmake a indistinctive short-term performance,don’t pass the significance testing.