Corporate Lifecycle, M&A Strategy And Market Performance

In recent years, with the development of Chinese capital market and the optimization of M&A environment, M&A events surge every year. It has been an important community issue about how corporation should make better use of M&A to optimize its function of resource allo cation and enhancing listed company competitive advantage among theorists and practitioners, which caused reflections on M&A strategy decision.In this study, we use the data to listed companies M&A from the year of 2006 to 2012 to do empirical analysis. Based on the resource-based view, we explore relationship between corporate life cycle and M&A strategy, with the special factor of political connection, also deeply analysis the regulation of political connection on relationship between corporate life cycl e and M&A strategy. The ultimate goal of behavior is result, and we further analyzed relationship between market performance and M&A strategy, with regulation of corporate life cycle and political connection on the foregoing relationship, respectively. The empirical result shows that the enterprise has different choice of M&A strategy at different stage of the life cycle. companies tend to related M&A strategy at growth stage significantly, while showing no preference at mature and recession stage. Official based political connection promotes the tendency of non-related M&A businesses. Different M&A strategy leads to different market performance. The market performance of non-related M&A is better than related M&A significantly, but strong official based pol itical connection lower the market performance of non-related M&A. The result should have certain enlightenment on corporate and investors' decision making on M&A strategy.