The Influence Of Officials' Inspection On Corporate Merger And Acquisition

In the context of economic transformation,the strategic choice of enterprises is subject to internal resource constraints and external institutional environment,and the complex relationship between enterprises and government is an important institutional environment.The government not only in the land,energy,capital,infrastructure projects and other important resources on the distribution of the dominant position,affecting the survival and development of enterprises,but also in policy development and administrative order implementation of the unstable situation,which brought a lot of business Uncertainties.In order to avoid over-reliance on specific resource controllers,to reduce operational risks,to gain superior competitive conditions and a favorable development environment,companies have the incentive to establish political links with leaders through various channels.Officials inspect companies as a common phenomenon is an important channel for enterprises to access government officials,companies can take this opportunity to establish close ties with the government and use the image and propaganda effect of leaders to send an effective quality signal to the market as well as government and Business relationship signal.For most enterprises,the leadership inspection itself is an affirmation of the development of enterprises,is one of the driving force for the follow-up development of enterprises.This paper takes the M&A event of small and medium-sized private listed companies in 2005 and 2015 as an example,and analyzes the relationship between the official inspection activities and the M&A behavior.The results show that the officials'inspection has a significant influence on the M&A strategy.In particular,official inspections make enterprises more focused on the maintenance and development of core competencies,and the political links established by official inspections promote mergers and acquisitions and related mergers and acquisitions in the industry chain;external political resources brought by official inspections help to ease market friction,reduce transaction costs,the more frequent inspections of officials,the more closely related to this political relationship,the more likely the enterprise to conduct off-site mergers and acquisitions.Inspectors of different sources have different effects on the regional selection of M&A.In particular,external political resources from the inspections of officials from other provinces and outside cities help enterprises to cross-border and cross-market mergers and acquisitions;the resources from local officials make enterprises more inclined to the local mergers and acquisitions.