Industrial Policy And Company M&A

Taking the M&A(merger and acquisition)data and relevant data of the Chinese A-share listed companies from 2006 to 2017,and the industrial policy data in the ?11th Five-Year Plan?,?12th Five-Year Plan? and ?13th Five-Year Plan?,this paper empirically studies the relationship between industrial policy and company M&A.Further,based on the differences of proprietary nature,local government's pressure and regional marketization's degree,it empirically studies again the relationship between industrial policy and company M&A.Finally,it empirically examines the companies' M&A performance.The study found that,compared with the companies without the support by industrial policy,the companies are more likely to do M&A with the support;Considering the difference of proprietary nature,the non-state-owned companies are more likely to do M&A with the support;Considering the difference of local government's pressure,in the areas where the local governments are under heavy pressure,the companies are more likely to do M&A with the support;Considering the difference of regional marketization's degree,in the areas of high marketization's degree,the companies are more likely to do M&A with the support;The M&A performance are worse of the companies with the support,which means the industrial policy could not improve the companies' performance.The research conclusions of this paper shows that,the company M&A,as one of the micro enterprise behaviors,will be affected by the macroeconomic policy variable-industrial policy.From the perspective of M&A,we discuss the implementation effects of industrial policy.With the help of industrial policy,the companies are more likely to do M&A,but their performance is reduced,which indicates the economic consequence of industrial policy is a two-edged sword.On the one hand,industry policy can help companies achieve the goal of rapid development by means of M&A,thus causing the adjustment and upgrading of China's industrial structure;On the other hand,the industrial policy could not improve the companies' performance,which shows the industrial policy could not make the companies ?stronger?.Therefor the effectiveness of industry policy remains to be further strengthened.Now,China's economy development enters the new normal.So,the government should adjust actively these contradictions between industrial policy and the new normal economy,in order to increase the effectiveness and applicability of industry policy.This paper could make three contributions: firstly,the existing papers about the macroeconomic policy and the company behavior,mainly focus on that how industrial policy influence company financing,company investment,company innovation and so on.However,there are few papers about the industrial policy and company M&A.Our research conclusions could enrich the economic consequences of industrial policy,and provide microscopic evidences for the economic consequences of industrial policy.Secondly,based on China's special political and economic system,the scholars have been researching the relationship among local government intervention,capital market system defects and company M&A.However,there are few papers about the macroeconomic policy and company M&A.Our research conclusions could enrich the influence factors of company M&A decision,and guide macroscopically company M&A behavior.Thirdly,there are academic debates about the effectiveness of the industrial policy.We empirically study the relationship between industrial policy and company M&A Performance,which could provide empirical evidence for the effectiveness of the industrial policy,from the perspective of M&A performance.