The Impact Of Equity Structure On The Cross-Border Mergers And Acquisitions Of Listed Companies

This paper studies the impact of cross-border mergers and acquisitions of Chinese listed companies.The study has theoretical and practical significance.In 2016,Chinese companies have announced 438 cross-border mergers and acquisitions transactions,increasing 20.94%compared with 363 in 2015;the total amount has reached 215.79 billion US dollars,increasing 147.75%compared with 2015.However,the success rate only reaches 40%.The imperfect equity structure of Chinese enterprises has become an obstacle to cross-border mergers and acquisitions,causing the agency problem between management and shareholders.The major shareholders may also damage the interests of minority shareholders and the integration of industries after mergers and acquisitions.This paper selects completed cross-border mergers and acquisitions from 2006 to 2017 by Chinese listed companies as the research samples as well as analyzing the influencing factors of cross-border M&A performance from the perspective of equity structure.This paper uses the event study method to study the influence factors of cross-border M&A performance and sets the dependent variable CAR,selecting representative indicators as independent variables to measure the equity structure,including the proportion of circulating shareholders,the proportion of the top ten shareholders,the proportion of institutional investors and the largest shareholder.The controlling variables selected in this paper are financial index and country difference index.Financial indicators include the size of the buyer's assets,the profitability and the asset liability ratio,and the national difference indicators including national cultural differences and global competitiveness.Then this paper conducts an empirical test.Petersen correlation test demonstrated in the independent and dependent variables is significantly related,proving there is no multicollinearity between variables.Then I build an OLS regression model to explore the impact of equity structure on the performance of the cross-border mergers and acquisitions.The main contribution of this paper is as follows:First,this paper analyzes the development process and location,industry distribution and other characteristics of cross-border mergers and acquisitions in China.It reviews the theoretical and empirical research on the impact of foreign direct investment and cross-border mergers and acquisitions at home and abroad.Second,the equity structure is separate from the general corporate governance in special research.Third,the impact of cross-border mergers and acquisitions on Chinese enterprises is estimated by combining the merger and acquisition database of Wind and Tong Huashun at the first announcement date.A comprehensive database of transaction information and corporate financial information is constructed.Fourth,this paper expects to provide valuable thinking for the research of cross-border mergers and acquisitions of Chinese listed companies and provide policy implications for future policymakers to develop more comprehensive laws.