How The Merger And Acquisition Goodwill Impact On Corporate Financial Performance

As the market economy system’s establishment and further development in China, merger and acquisition activities in the capital market are becoming more and more frequent. In order to cope with the increasingly fierce market competition,more and more enterprises choose M&A to expand resources, gain economies of scale, avoid tax and so on. Finally they can get excess returns of M&A. With the development of merger and acquisition activities, the number of enterprises which have goodwill in M&A and the amount of goodwill is rising year by year. Merger and acquisition goodwill plays a more and more important role in merger and acquisition activities. it has not only an impact on the evaluation to the target enterprise,but also has an important impact on the financial performance of the enterprises. At the same time, the nature of enterprises will have an impact on the relationship between the goodwill and financial performance of the enterprises. Besides, the way of payment will also have an impact on the relationship between the goodwill and financial performance of the enterprises. So this article will focus on the impact of goodwill produced in the merger and acquisition activity on the financial performance. At the same time,taking payment,the nature of enterprises into consideration to discuss the influence of different cases to the financial performance. And according to the results of the inspection I will put forward relevant Suggestions. This will has positive theoretical and practical significance on the evaluation to target enterprise in the negotiation, payment and the management to the goodwill.Based on the comparison and analysis to the related literature review, the paper uses the cross section data to test the relationship between the goodwill and the financial performance and at the same time take payment and nature into consideration. The conclusions are as follows:(1)merger and acquisition goodwill has a significant positive impact on corporate financial performance; (2)the merger and acquisition goodwill’s impact under state-controlled cases on corporate financial performance is more significant than under the non-state holding.;(3)the merger and acquisition goodwill’s impact on corporate financial performance under cash payment is more significant than under the non-cash payment;At last, we make some suggestion, point out the inadequacies of the study, and provide some suggestions for the future research.