Firm Life Cylce,Merger Types And Merger Performance

With progressive development and refinement of our country capital market,more and more firms conduct mergers and acquisitions to boost firm development.Shown by Qingke data,merger deal size in our country has already exceeded one thousand billion.Firm merger is not only one important way for firm to get quickly development,but also important measures of adjusting economic structure and industrial upgrading.Our country also possesses condition of merger and acquisitions after accumulation of several decades of development,recently,some big state-owned enterprise has conducted mergers pushed by supply side reform.More and more merger cases happening worldwide causing the attention of so me scholars,especially whether merger can improve firm performance,and empirical study conclusions show most mergers can't bring out firm performance improvement,but more and more firm mergers happening,so the contradiction phenomenon interests many scholars.and some of them try to find reasons from factors of affecting firm s merger performance,for example,including way of payment,merger type and merger purpose;and some scholars works from management perspective,if character difference of managers,which means if exceeding self-confident managers bring out low efficiency of merger;some scholars research from firm life cycles perspective,try to find performance difference from different industry cycles and different merger types,and try to find suitable merger type in different firm life cycles.Firm life cycle theory separate firms development into several stages with distinctive characters,and think firms should make reasonable development strategies according to characters of kinds of stages.Merger is important development strategy for firm,horizontal merger,vertical merger and mixed merger are divided according to merger firms related with different industries and competition between firms.Follow firm life cycles division method in empirical study,separate firm life cycles into start-up period,growth period,mature period and decay period.Make market forces theory,transaction cost theory and diversified management theory as basement,involve firm characters in growth period,mature period and decay period,and advantages of horizontal merger,vertical merger and mixed merger,submit the assumption of this article.This article utilizes China listed 213 companies mergers cases in 2012 as sample,first utilize event study method to analysis short period market reflection of firm merger;select 213 firms financial index of current year of merger,one year before merger,one year after merger,two years after merger and three years after merger with totally five years financial index as reference,apply factor analysis method to derive comprehensive score model at five years firm performance and get comprehensive performance of above five years listed firms,and research suitable merger types for firms which are in growth period,mature period and decay period.Empirical analysis result shows: firms in growth period are suitable for horizontal mergers,firms in mature period are suitable for utilizing vertical merger or mixed merger,and firms in decay period are suitable for utilizing mixed merger.In the end,according to theory analysis and empirical analysis result,do summary for whole article,and provide advice from firm perspectives,firms should recognize current firm status,make appropriate development strategies,and focus more on integration work after merger.And point out the lack of this research and future research direction.