Research On The Impact Of Performance Commitments In Corporate Mergers And Acquisitions On The Target Company’s Financial Development Capabilities

Along with our country’s economic development,enterprise mergers and acquisitions between activities also increasingly active,M&A behavior has always been the focus of the study of theoretical and practical circles,both horizontal mergers and acquisitions to expand the scale of their enterprises,and the longitudinal mergers makes the integration of production,or the diversity of mergers and acquisitions to promote the transformation and upgrading of enterprises,mergers and acquisitions in promoting the development of the group’s overall stability,improve the value of the enterprise as a whole plays an important role.Occurred in recent years,increasing the number of mergers and acquisitions,due to large risk of mergers and acquisitions,corporate restructuring after the need to effectively integrate in many aspects,so M&A failures are not in the minority.In order to guard against risks and protect the interests of minority shareholders,the performance pledges gradually appear in the merger and acquisition activity of enterprises,and the proportion of them is rising.Performance pledge system is designed in order to protect the interests of minority shareholders,to prevent the related transactions of the major shareholders use their convenience and the interests of the listed company for delivery to damage the interests of minority shareholders.The introduction of the performance commitment system,on the one hand,can restrain the risk of merger failure from the valuation bubble,and on the other hand,it can also facilitate the smooth operation of mergers and acquisitions.Based on the enterprise mergers and acquisitions in 2013 as the basis of research,and adopted the subsequent four consecutive years of 2013-2016 financial data(including 3 years commitment period,1 year commitment period)as the research object,examined whether there is a performance promise in mergers and acquisitions,performance promised compensation mode,the direction of the commitment,the degree of commitment and commitment during the impact on the M&A target enterprise financial development capacity.According to the empirical results of this paper,the main conclusions are: 1.The target enterprises that have signed the performance pledge is better than the target enterprises thathave not signed the performance pledge.2.The compensation method for cash payment,share payment and the compensation of mixed payment has a greater impact on the financial development ability of the target enterprise.3.Bidirectional commitment can strengthen the relationship between the method of compensation and the financial development ability of the target enterprise.4.In signing the performance commitment agreement,the profit growth of the target enterprise shall be reasonably stipulated according to the evaluation result of the intermediary institution.5.After the performance pledge expires,the financial development ability of the target enterprise will decrease.In this paper,on the basis of the empirical results,combined with some problems existing in current performance pledge system,this paper puts forward the policy Suggestions are: 1.the reasonable use of performance pledge system,improve the ability of target the financial development of the enterprise.2.establish a post-commitment post-evaluation mechanism to promote the sustainable development of target enterprises.3.Timely analyze the reasons for substandard performance,ensure the smooth completion of performance targets,and promote the continuous improvement of financial development ability of target enterprises.4.Strengthen the compensation information disclosure of substandard performance,strengthen the external supervision power of the target enterprise,and play the positive role of performance pledge.The shortcomings of this paper mainly include: 1.The setting of individual variables has certain subjective judgment.2.The selection of indicators has a certain partial.3.The impact of earnings management is not taken into account.4.Fewer samples were studied.In view of the shortcomings of this paper,the proposed improvements mainly include:1.To build a comprehensive evaluation of the enterprise’s financial development ability.2.Expand the number of samples.3.Expand the span of time.