A Study On The Influence Of Institutional Distance On The Performance Of Chinese Enterprises' Cross-border M&A

Under the dual driving of internal and external,the Chinese enterprises are actively involved in the international competition,and the rapid development of foreign direct investment is realized.Also,the Chinese enterprises are becoming the important investment subject in the global market.Cross-border M&A has become more and more popular with Chinese investors because of its unique advantages,which is directly represented as the quantity of M&A and the amount of M&A after the financial crisis.But this does not represent the smooth sailing of internationalization.In fact,the overseas expansion of Chinese enterprises is still in an immature stage.There are still many difficulties,one of which is that a significant portion of the enterprise's M&A performance is poor and fails to achieve the desired objectives.When the success rate of M&A is worrying,which factors will affect the performance of cross-border M&A has become the focus of academic attention.As an important external factor,"institution" has been paid more and more attention.Therefore,from the perspective of institutional distance,this paper divides it into political distance,economic distance and cultural distance,and introduces M&A experience as a regulating variable to comprehensively investigate the mechanism of institutional distance on cross-border M&A performance in different dimensions,to improve M&A performance.Based on outsider disadvantage theory,organizational learning theory and review of related literature,this paper puts forward the research hypotheses about the influencing factors of cross-border M&A performance,and establishes a multivariate linear regression model.According to a certain principle,the 173 cross-border M&A events initiated by the Chinese listed company in 2007-2016 are selected as the study samples,and the accounting index method is adopted to evaluate the acquisition performance as the independent variable,and the three sub-dimensions of the institutional distance as the independent variables,and the cross-border M&A experience is the adjustment variable,the enterprise scale,the property of the ownership of the enterprise,the proportion of the equity owned by the merger is the control variable,the system distance is multiplied by the acquisition experience as a set of interaction variables.At last,the effect of different factors on the performance is analyzed.According to the result of the regression,the political distance has asignificant positive effect on the performance of M&A,because the transnational corporation can obtain the institutional environment of the country by the system arbitrage.The existence of cultural distance will adversely affect the performance and hinder the integration of mergers and acquisitions,while the economic distance will not have a significant impact on the performance.Cross-border M&A experience can not only help enterprises to improve their performance,but also further promote the positive role of political distance,so that enterprises can achieve institutional arbitrage more efficiently in a differentiated environment.At last,on the basis of the above conclusion,the author puts forward the suggestion from the micro level to the enterprise,and points out that the enterprise should do a good job in M&A research,attach importance to institutional differences,strengthen the cultural integration,attach importance to the accumulation of the international experience,and make better use of the comparative system advantage of the host country through the experience;It also enlightens the government to deepening the reform of state-owned enterprises,optimize the overseas investment information platform,to improve the risk guarantee system of overseas investment and acquisition,to help enterprises better realize institutional arbitrage.