An Empirical Study On The Effect Of Payment Methods On M&A Performance

In today's increasingly competitive market,companies need not only rely on internal self-development,but also seize the opportunity of mergers and acquisitions to achieve rapid expansion.Whether mergers and acquisitions can create value is the focus of scholars and investors.M&A has become the main way for companies to expand their scale,seek competitive position and develop themselves.In recent years,the amount and quantity of M&A has been showing a momentum of year-on-year growth.The country has also introduced a number of relevant laws and regulations to optimize China's industrial structure.M&A is favored by people.In 2008,the China Securities Regulatory Commission reviewed and passed Article 36 of the newly revised "Measures for the Administration of the Acquisition of Listed Companies." The acquirer may use cash,securities,cash,and securities in combination to pay for the purchase of listed companies.Under such a system and environment background,studying the effect of payment methods on M&A performance will help guide merger and acquisition companies in choosing appropriate payment methods.On the other hand,it also provides important reference for governments and regulators.According to the literature review,there are significant differences in the M&A performance of different payment methods.However,the best M&A performance of which payment methods does not have a unified conclusion.The existing literature,especially the domestic literature,mainly focuses on which of the two types of single payment methods cash payment method and stock payment method is better.As hybrid payment methods are more widely adopted,it is necessary to study merger performance under mixed payment methods.This thesis uses foreign related theories and the background of our country's system to study the impact of cash,stocks,cash and hybrid payment methods on the performance of the main parallel M&A.This study finds that the relevant theories of M&A payment methods in foreign countries are not entirely suitable for China's capital market,and it is of important reference value to study the choice of payment methods based on China's special institutional background.This article selects the main merger company that took place between 2011 and 2014 as the initial research sample,and conducts strict screening according to certain rules.Finally,586 samples are determined,and the signal theory,free cash flow theory,and risk sharing theory under asymmetric information are analyzed.The short-term and long-term M&A performance effects under different payment methods.Using the signal theory and combining the effects of taxation effect,hypothesis 1: There are significant differences in the short-term M&A performance under different payment methods,and the short-term M&A performance of the stock payment method is the best.Employing free cash flow theory and risk sharing theory and combining corporate governance perspectives,hypothesis 2: There are significant differences in long-term merger performance under different payment methods.The long-term merger performance of cash and stock hybrid payment methods is the best.In the empirical part of the text,the mean value t-test is first performed on the merger performance of the three payment methods.Then the single-factor analysis of variance(ANOVA)is used to compare the merger performance of the three payment methods.Finally,a multivariate regression method is used to test which of the three methods.The short-term and long-term M&A performance of payment methods is the best.The study found that: in terms of short-term performance,the payment methods are different,and there are significant differences in M&A performance.The short-term M&A performance under the stock payment method is the best.The long-term M&A performance of cash and stock hybrid payment methods is the best.At the end of this paper,based on empirical research conclusions,we propose targeted recommendations to encourage companies to choose hybrid payment methods in mergers and acquisitions.This can effectively avoid the financial risks faced by companies after mergers and acquisitions.In the long term,it is beneficial to enterprises.M & A performance improvement.