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On M&A Performance Evaluation From The Perspective Of Cash Flow And The Performance Influence Mechanism Among Listed Companies

Posted on:2010-05-31Degree:DoctorType:Dissertation
Country:ChinaCandidate:H F MaFull Text:PDF
GTID:1119360278961439Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
As an indispensible measure of resource collocation, M&A plays a crucial role in social capacity development. In 21st century, M&A has developed rapidly in China. It becomes the basic problems among M&A theory and empirical study that how M&A performance goes and which factor induces the individual differences of M&A performance. Regarding cash flow analysis as the basis of M&A performance evaluation, this study selects M&A transactions of listed companies during the year from 2003 to 2005 as the samples for empirical analysis. The former studies of M&A only focus on financial performance, while this study makes up this shortage and tries to grasp the real evolving rule of M&A performance.Regarding cash flow indexes combined with factor analysis model as a comprehensive performance evaluation method, this article firstly studies the M&A financial performance of listed companies. Then, the approach of year's mean adjustment between comparison samples is adopted to exclude the influence from non-M&A factors. Finally, the comparison model and intercept model are applied to identify the M&A financial performance. The research discovers that the M&A action has brought remarkable negative influence on M&A financial performance of acquiring firms, but the long-term performance of M&A has meliorative trend; on the other side, the M&A action has no remarkable influence on financial performance of target firms, which does not accord with prior research conclusions. The study finds that the M&A financial performance based on cash flow obviously deviates from the M&A financial performance based on traditional earning capacity indexes, which demonstrates that the M&A financial performance identified by traditional earning related indexes occurs distortion on some degree.Using the same method to evaluate the M&A social performance of listed companies, this paper reveals that the M&A action has no significant influence on social performance of acquiring firms, but has remarkable negative influence on social performance of target firms. It is found that employee's welfare lever dropping sharply caused the social performance's great incline of target firms in further research. Empirical study shows that employee rights and interests of target firms don't be protected effectively during control right changing process. The study on M&A financial performance and M&A social performance observes that there is a negative significant correlation between M&A financial performance and M&A employee benefits performance among acquiring firms, but the negative correlation is not significant among target firms; meanwhile, there is a positive correlation among M&A financial performance, tax and fee contribution performance of M&A, infringing situation performance of M&A for all sample firms, which shows there exists a good compatibility among them.For M&A financial performance influence mechanism of acquiring firms, the research finds that the pursuit of synergy effect, relative scales of M&A, establishment of strategy committee of board, ST situation before M&A and the year when M&A happened has significant ability to explain the M&A financial performance of acquiring firms. Meanwhile, we find that managerialism, free cash flow hypothesis, the private controlling shareholder and share proportion held by management also has certain explanatory capacity. For M&A financial performance influence mechanism of target firms, we find that the pursuit of synergy effect, the protection of listing status, capital structure, financial resources, industry matching situation and the year when M&A happened has significant ability to explain the M&A financial performance of target firms. At the same time, Z indicator, establishment of board chairman and general manager, the relative size of top managers also has certain explanatory capacity. Based on the conclusions of influence mechanism research, we construct the forecast model of M&A financial performance of target acquiring firms and target firms by Logistic regression, the general accuracy of forecast model respectively achieves 72.4 percent and 74.2 percent.
Keywords/Search Tags:Merger and Acquisitions, Aspect of Cash Flow, Financial Performance, Social Performance, Influence Mechanism
PDF Full Text Request
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