The Influence Of Political Connections Of Investment Banks On The Feature And The Performance Of Merger And Acquisition

With the fast development of m&a(merger and acquisition)and the revolution of marketization,the investment bank is playing a more and more important role.Since 2010,listed companies have been disclosing their m&a activities.We also notice that political connections have great impact on m&a activities.Therefore,we initially propose the study topic.This essay uses the m&a activities of A share market during 2010-2014 as a sample and the Heckman model in order to control the investment bank's reputation variable and the sample self-selection effect.Here are the conclusions.(1)The political connections of investment bank will help obtain approval from CSRC(China Securities Regulatory Commission)and have insignificant impact on waiting time.(2)The political connections of investment bank will increase the short-term excess return and decrease the long-tern return of m&a.(3)When the market is “colder” or the clients are more important,the political connections of investment bank will have greater impact on the possibility of obtaining approval and improvement of short-term excess return.Here are the meanings of the article.(1)Providing a new study perspective of investment bank's impact on listed companies.(2)Offering a different point of view of how political connections affect m&a activities.(3)Using “market” and “client” as two dimensions to study the influence of political connections of investment banks on m&a activities.