An Empirical Study On The Influence Of Institutional Investors’ Shareholding And Debt Constraints On M&A Premium

In recent years,the wave of mergers and acquisitions(M&A)in the domestic capital market has been high,and M&A has become an important way for enterprises to develop and expand and improve their market position.However,due to the weak effectiveness of the domestic capital market and the information asymmetry between the two parties of M&A,high premium M&A events occur frequently,and high premium M&A can damage the corporate value and affect the long-term development of enterprises.As the voice of institutional investors in the capital market gradually increases and the proportion of corporate debt financing gradually increases,the role of the two in corporate governance is increasingly prominent,and it is worth paying attention to whether the two can influence the company’s M&A decisions.This paper mainly adopts a combination of theoretical analysis and empirical research to explore the relationship between institutional investors’ shareholding,debt constraint and M&A premium,taking the M&A events occurred in A-share listed companies in Shanghai and Shenzhen from 2004 to 2020 in China as the research object.This paper consists of six parts: the first part is the introduction,which introduces the background and significance of the article,and clarifies the research methodology and the writing framework of this paper by summarizing and combing the relevant literature at home and abroad,and points out the possible innovation points of the article.The second part is the theoretical foundation and concept definition,which explains the basic contents of theories such as principal-agent theory and information asymmetry theory,and defines the definition and measurement indexes of the relevant variables in the study.The third part is the theoretical analysis and research hypothesis,which combines the previous theoretical foundation and discusses the effects of institutional investors’ shareholding and debt constraints on M&A premium and the interaction effects of the two,and proposes the research hypothesis of this paper.The fourth part is the empirical design,which indicates the data sources and screening criteria of the article,and establishes the relevant regression models according to the hypotheses.The fifth part is the empirical analysis,through the regression analysis of relevant data to draw the conclusions of this paper:(1)overall institutional investor shareholding has a dampening effect on M&A premium;(2)from the perspective of independence,independent-type institutional investor shareholding is found to have a dampening effect on M&A premium;(3)the level of corporate debt constraints has a dampening effect on M&A premium;(4)overall institutional investor shareholding weakens the dampening effect of debt constraints on M&A premium;(5)independent-type institutional investor shareholding weakens the dampening effect of debt;(6)extended tests find that neither institutional investors’ shareholding nor debt constraints have an inhibitory effect on M&A premiums in SOEs.Section 6 concludes the paper with policy recommendations.The research in this paper shows that independent-type institutional investors’ shareholding and debt constraint will inhibit the level of M&A premium of firms respectively,and both will have substitution effects in inhibiting the M&A premium of firms,enriching the research results on the effects of institutional investors and creditors on the M&A premium of firms.