Research On The Impact Of Internal Control Quality On Acquisition Performance

With the deepening development of economic globalization,the rapid progress of science and technology,and the increasingly fierce market competition,merger and acquisition(M&A)has gradually become an effective way for enterprises to innovate and develop,transform and upgrade,or adjust the organizational structure.Although M&A is favored by listed companies,a large amount of empirical evidence shows that the M&A of most companies has not been successful and has not achieved the expected results.Successful M&A is closely related to the selection of M&A targets,the supervision of M&A processes,and the integration of M&A resources.The smooth development of these processes depends on a sound internal control system.In addition,according to the high-level echelon theory,the company's business management is affected to a certain extent by the personality characteristics,cognitive biases,and personality traits of senior managers and senior management teams.Among them,the narcissistic characteristics of leaders are likely to affect the role of internal control in M&A activities.Based on this,it is necessary to study the influence of the quality of internal control on acquisition performance and the influence of the level of narcissism of leaders on the relationship between the two.Supported by multiple theories such as principal-agent theory,high-level echelon theory,and synergy theory,the article analyzes the mechanism of internal control quality,acquisition performance and leader narcissism in detail,and proposes two assumptions of this article: Good internal control quality helps to improve acquisition performance.Leader narcissism will weaken the role of internal control in the promotion of acquisition performance.In order to further test the correctness of the theoretical analysis hypotheses,The article takes the M&A events of A-share listed company in Shanghai and Shenzhen stock exchanges from 2012 to 2017 as samples,adopts comprehensive financial indicator analysis to measure acquisition performance,and establishes a multiple regression model to test the influence of the quality of the internal control of the acquirer on acquisition performance and the moderating effect of leader narcissism on the relationship between the two.In addition,in order to enhance the reliability of empirical results,a variety of robustness tests were further performed.The empirical results show that the high-quality internal control of the acquirer helps to enhance acquisition performance,while the narcissism of the leader can inhibit the internal control from playing a role in M&A activities.The above results are still stable under a number of robustness tests using the PSM method and changing the explanatory variable measurement method.The research conclusions not only enrich the related research on the factors affecting acquisition performance,but also have certain reference significance for listed companies to avoid M&A risks and improve acquisition performance.