Research On The Relationship Between Cost Stickiness And M&A Performance

Market competition is increasingly fierce,as long as mergers and acquisitions.however,it is contradictory to the results of mergers and acquisitions of Chinese enterprises in the mediocre performance,the success rate is as low as 10%.Under the institutional background of China’s capital market,the improvement of performance after merger and acquisition is one of the main objectives of enterprises’ investment efficiency management and control.The cost management decision of the management level directly determines the resource investment level in the process of merger and acquisition integration,and cost management has become the inevitable requirement of enterprise development.Therefore,the research on the relationship between cost and corporate M & A performance can accurately and systematically reveal the action mechanism of the performance changes brought by the management’s micro decisions for corporate M & A exchanges,which has important theoretical and practical significance for the improvement of cost practice management and the improvement of corporate investment efficiency.On the basis of the existing theories and empirical studies on cost stickiness at home and abroad,this paper combines the theory of scale economy,principal-agent theory,corporate governance theory and strategic management theory to analyze the impact of management cost adjustment on the performance of M & A from the perspective of resource adjustment and management’s self-interested behavior.On this basis,draw lessons from Weiss(2010)model,to our country enterprise mergers and acquisitions events in 2004-2016 the cost of the viscosity level measurement,and by building a multivariate regression model,the test of cost viscous effects on M & A performance,and further investigation of relationship between corporate governance has a regulation,as well as the nature of property rights of corporate governance in different enterprises adjust action if there is a difference.The main conclusions of this paper are as follows:(1)In China’s a-share market,cost stickiness is prevalent in companies that have m&a transactions,and it will reduce the performance of enterprise M & A.(2)A good corporate governance mechanism can form an effective constraint on managers and enable them to conduct cost management from the perspective of maximization of corporate interests,thus significantly adjusting the negative correlation between cost stickiness and corporate M & A performance.(3)Compared with state-owned enterprises,general corporate governance in non-state-owned enterprises is more effective in restraining and supervising themanagement,and corporate governance has a more significant moderating effect on the negative correlation between cost stickiness and corporate M & A performance.In addition,in order to increase the robustness of the research results,the lag effect test was conducted in this paper to verify the influence of endogeneity.Explained and explained variables are replaced to make up for the limitations of data sources,the results were unchanged,further confirming the robustness of the results.Finally,combined with mechanism analysis and research conclusions,this paper puts forward relevant Suggestions for the establishment and improvement of cost control system of listed enterprises in China and the optimization of enterprise resource allocation in M& A transactions.The innovation of the paper is mainly shown in the following aspects:(1)Broaden the field of study on the economic consequences of cost stickiness,provide new empirical evidence for the study of the economic consequences of cost stickiness,and accurately reveal the mechanism of action between management resource decisions and corporate M & A performance,which is helpful for management to optimize cost management and improve investment efficiency.(2)It enriches the research on the influencing factors of M & A performance and provides a reference for enterprise managers and shareholders to avoid making blind and inefficient M & A decisions.(3)Weiss(2010)is used to quantify the cost stickiness,so that the level of the cost stickiness can be directly reflected by the numerical value,breaking through the previous indirect measurement of stickiness only through ABJ model,and providing a more intuitive method for the analysis and inspection of the economic consequences of cost stickiness.