Can Law Firms Help Companies Resist "Barbarian Invasion"?

With the high-speed development of economy in our country,mergers and acquisitions between enterprises have become an effective way of resource integration in capital market,hostile takeover events often occur,from 2005,"The Battle of Treasure",the hostile takeover events in China’s capital market have gradually attracted public attention.In 2006,the guidelines on the Articles of Association of Listed Companies were revised to give enterprises a greater degree of freedom in their articles of association,eliminating all kinds of restricts.In order to deal with such hostile takeover,many listed companies have set up Anti-takeover provisions in their articles of association to reduce the probability of target companies being acquired in the capital market,in order to resist such "barbarian"behavior.Since listed companies attempt to reduce the probability of being merged by establishing Anti-takeover provisions in their articles of association,how to set up Anti-takeover provisions professionally to resist merger and acquisition?Who can be consulted when setting up Anti-takeover provisions?How to ensure that its anti-takeover provisions are effective and accepted by the market?This problem deserves our further study.When it comes to the establishment of articles of association of listed companies,we must pay attention to one group-law firms.The law firms are composed of a large number of lawyers with professional qualifications,using professional knowledge and skills to provide clients with a variety of legal services and consulting services.When listed companies set up and update their articles of association,they often hire professional law firm teams to provide services to ensure the legal compliance and effectiveness of the articles of association.Enterprises employ excellent law firms to provide legal consulting services,which can help enterprises establish or modify Anti-takeover provisions in their articles of association,resist hostile mergers and acquisitions,and reduce the probability of enterprises being acquired.In this paper,the perspective of law firms was used to study a-share listed companies in Shanghai and Shenzhen from 2007 to 2018to study the influence and mechanism of law firms on mergers and acquisitions probability of target enterprises.Furthermore,the paper further distinguishes whether there are differences in the influence of law firms on the probability of mergers and acquisitions of target enterprises under different enterprises of different nature,different sizes of law firms and different experience situations of law firms,which provides a new perspective for the research.The structure of this paper is as follows:The first part is the introduction.Combination with relevant national policies and regulations,this part expounds the frequent occurrence of malicious mergers and acquisitions in the capital market in recent years,which leads to the research background and significance of this paper,then puts forward the research objectives and content of this paper,and finally summarizes the research methods and innovation points of this paper.The second part is the theoretical basis and literature review.This part introduces some theories related to the research of this paper,integrates the current research of domestic and foreign scholars,and reviews these literatures,and leads to the research content of this paper.The third part is the institutional background and research hypothesis.This part introduces the research on mergers and acquisitions in China’s capital market,and then expounds that in addition to the current research factors,law firms are also a key factor that is worth studying.At the same time,it also distinguishes the difference of the influence of law firms on the probability of enterprises being acquired under different circumstances,as well as the moderating effect of this logic chain.The fourth part is the research design.This paper explains the selection of samples and data sources,and defines the main research variables.Finally,the regression model of this paper is established by referring to existing literature research.The fifth part is the analysis of empirical results.Empirical analysis was carried out according to the research hypothesis proposed above,including the following parts:descriptive statistics,correlation analysis,single factor analysis and regression result analysis,and endogeneity test and robustness test were carried out on the regression results.The sixth part is further analysis,including the following parts:mechanism analysis,heterogeneity analysis and economic consequences analysis.The seventh part is the research conclusion and policy suggestion.This part puts forward policy suggestions based on the empirical results obtained above and the existing theoretical basis,and also points out the limitations of this research.The research results of this paper are as follows:1.Under the same conditions,excellent law firms can help enterprises set up Anti-takeover provisions to resist mergers and acquisitions,and reduce the probability of target enterprises being acquired.2.Compared with less experienced law firms,experienced law firms reduce the probability of target enterprises being acquired more significantly.3.Compared with state-owned enterprises,excellent law firms reduce the probability of target enterprises being acquired more significantly for non-state-owned enterprises.4.The characteristics of ownership structure will have a moderating effect on the mechanism of law firms’ influence on the probability of enterprises being acquired,and management ownership can reduce the influence of law firms on the probability of enterprises being acquired to some extent.5.Further research shows that law firms can not only reduce the probability of external acquisition events,but also reduce the probability of successful acquisition.This paper provides empirical evidence from the perspective of law firms for preventing and resisting hostile takeover behaviors,and provides new empirical evidence for the economic consequences of law firms playing a role in the capital market,enriches domestic research in the field of "law and finance" and provides positive policy suggestions on how to use indirectly related professional groups to serve the activities of market subjects,promotes the healthy and stable operation of the capital market and facilitates the reform of the capital market.