Research On The Impact Of Economic Policy Uncertainty On Mergers And Acquisitions

As the largest emerging economy in the word,the Chinese government often issues a series of macroeconomic policies to regulate economic development.On the one hand,these policies often stimulate economic growth.On the other hand,they also have the effect of “policy experiments”.The introduction and changes of various policies have undoubtedly increased the uncertainty of economic policies.A growing number of studies have also focused on the impact of economic policy uncertainty on the production and operation activities of enterprises,especially in the field of enterprise investment.Nowadays,China is in the critical period of economic transformation,and it is extremely significant to optimize the allocation of existing resources.Mergers and acquisitions bear the heavy responsibility of adjusting the industrial structure and are also an effective means of stock adjustment,which is conducive to improving economic efficiency.Based on the above analysis,this paper studies and validates the impact of economic policy uncertainty on mergers and acquisitions.Firstly,based on the management opportunism theory and the market opportunity theory,this paper analyzes the mechanism of economic policy uncertainty on mergers and acquisitions in detail.Secondly,this paper makes an in-depth analysis of the heterogeneous impact of economic policy uncertainty on mergers and acquisitions of different types of enterprises from three perspectives: Industry heterogeneity,the nature of enterprise ownership and the stage of enterprise development.Finally,this paper takes the mergers and acquisitions events of A-share listed companies in China from 2000 to 2018 as the research sample to test the above theories and perspectives.The main conclusions of this paper are as follows:(1)The impact of economic policy uncertainty on mergers and acquisitions is significantly positive.(2)In terms of the mechanism,the uncertainty of economic policies has to some extent eliminated the worries of management's “empire building” activities,inducing listed companies to participate in more mergers and acquisitions and increasing the scale of mergers and acquisitions.At the same time,the rising of economic policy uncertainty also increases the dual risks of operation and financing of small and medium-sized enterprises,increasing the risk of bankruptcy of these enterprises,thus becoming the target of merger and acquisition expansion of listed companies in the industry.(3)The impact of economic policy uncertainty on the mergers and acquisitions of capital-intensive industries,non-state-owned enterprises and high-growth enterprises is more significant.