Empirical Research On Corporate Governance And M & A Performance

The western countries as U.S. have experienced the fifth merger wave, M& A has become the important means to implement the enterprises'strategic expansion and it is helpful to realize the resource allocation in global market. Although the financial crisis broken out in 2008 makes enterprises survival more diffcult than before, it also provides many opportunities to enterprises'M& A. As far as the practice of merger and acquisitions in our country is concerned, M& A of Chinese Listed Companies has entered a new development stage. Whether in mergers and acquisitions scale, method or the purpose of such acquisition has prestented new features alongside our countries control rights market developing since equity division reform of listed companies from year 2005. It is necessary to study M& A performance from a new perspective under different situations. M& A is not only an external mechanism but also one of the endogenous factors for corporate governance, which play the role in corporate governance with other indispensable factors, such as ownership structure, director board mechanism, the management incentive mechanism, and etc. Therefore, in this paper we will study the evaluation of performance of Chinese M& A listed companies under the framework of corporate governance, espically the relationship between corporate governance and performance of M& A systematically.In the first place, we define concept on corporate govrnmance, merger and acquisition. Based on literature review related M& A performance from abord and civil scholars, we found out the starting point of this paper. Secondly, we put forward some hypotheses on the relationship between ownership structure, director board mechanism, managerial incentive mechanisms and M& A performance by studying the relationship between corporate governance and M& A performance of Chinese Listed companies.Thirdly, by using methods of factor analysis and independent sample test, we envaluate the M& A performance of listed companies. The hypotheses about the relationship between corporate governance and performance of M& A are tested by multiple regression models. Finally, based on the relevant theoretical derivation and empirical study, we give some proposal to enterprises and government on how to optimize the performance of listed companies.The main conclusions of this paper are as followed:Firstly, as the relation between ownership structure and performance of M&A, the largest stockholder control has negtive impact on acquisition performance, equity balance ratio between the largest and smaller shareholders has positive impact on it, and performance of M&A in Chinese state-owned listed companies has no significant diffenence to that in private-ultimately-controlling listed companies. Secondly, as the relation between director board mechanism and performance of M&A, scale of director board has no obvious effect on the performance of M&A, at the same time, the separation of chairman and CEO is helpful to the firm's acquisition performance, the higher the propotion of independent director, the better performance of M&A. At last, as the relation between managerial incentive mechanism and performance of M&A, monetary income of senior manager has positive effect on the performance, the hidden income has negative effect on it in the short term and has no significant realation with the performance in the long run. The equity incentive effect on M&A performance is also more obvious in the long term.