Study On The Influence Of Audit Industry Specialization On M&A Performance Under Different Type Of M&A

With the improvement and development of market economy in China,large amount of enterprise select M&A as the method to improve performance and market competitiveness.M&A has become as hot issue in academic world,many scholars find that not all company can reach their purpose,the information asymmetry between the acquirer and target has negative effects on M&A performance.According to the relevance of industry,M&A can be divided into two kinds,the related and non-related M&A.Non-related M&A can help company to avoid entry barriers and move into new areas in a short time,but the potential M&A risk can’t be underestimated.As the important strategy of scale expansion,resource acquisition and competitiveness improvement,acquirers need to hire intermediary organizations to reduce risk in M&A activity.Intermediary organizations that participate in M&A mainly include accounting firm,law firm,assets evaluation organization and investment bank.Based on information asymmetry theory and related theories of M&A,we uses the M&A events of Chinese listed companies from 2009 to 2013 to empirically examines relationship among the merger type,auditor industry specialization and M&A performance from the perspective of acquirer firms.We find that auditor industry specialization of the target firms can significantly enhance M&A performance.In addition,we validate that the positive influence of auditor industry specialization M&A performance is more significant in non-related M&A.We propose that acquirers should pay attention to the important role of intermediary organizations in M&A activities,intermediary organizations should accumulate more experience and improve their ability,regulator should pay close attention to the supervision and management of M&A activities.Our findings provide strong support for the importance of auditor industry specialization in M&A activities and expand the study of M&A.