Synergy Of Economy Network In Merger And Acquisition

Merger and acquisition (M&A) are huge venture investment, and positive synergy brings excess returns. Precise evaluation of M&A synergy is the foundation of predicting the effect of M&A. Some scholars have done some research on this. With resource-based theory of firm (RBT), they begun with the research of enterprise resource, and made rational classifications of enterprise resource. By working on general disciplines of interactions among resources, they have well explained the mechanism of resource synergy after M&A. However, we found that, the research only on the effect of single-resource change of two firms could neither not work out the effect of internal firm resource network, nor evaluate the synergy of economic network combined by two firms in a M&A activity. The mechanism of how M&A work on economic network synergy. Therefore, this dissertation studies how M&A under different dimensions of network structure affects the economic network synergy, standing on the integrity of economic network and properties of network structure.In order to research into the effect of M&A on economic network synergy, the thesis analyzes every level of economic network synergy. Firstly, it defines the intension and extension. Former scholars just mainly summarized the properties of network organization, based on which it proposes economic network, an organization structure between market and hierarchy, by making use of the research achievement of social network and complex network. The essence of economic network is the system composed of economic entities and their interrelations inside organizations. With the definition of intension and extension of economic network, it further discusses the source of economic network synergy, and finds out that the source is the economic effectiveness and the reliability of structure. In previous research on the performance of economic network, some scholars take the perspective of lowering trade cost to describe the economic effectiveness, but there are few descriptions about structural reliability of network integer. The thesis proposes that there are one or several high-centrality nodes in network and the network where the degree distribution of nodes is comparatively symmetrical is a stable and effective structure. Within these works, it describes the structural properties of some common economic networks, such cluster, collection, alliance and enterprise group.The thesis adopts the synergy theory of economic network to analyze enterprise group. It is found that in the economic network of enterprise group, there are resources nodes in there levels, which are general resources locating in different stages of value chain, inter-organization resources, and relation resource of enterprise group, and two relations among these resources, production and structure.Then we research into the effect of M&A on economic network of enterprise group. On one hand, it does research on the economic effectiveness that M&A activities bring for economic network synergy of enterprise group. The economic network of enterprise group is composed of four levels. The first level consists of the nodes of enterprises, where M&A events would bring adjustment and integration inside an industry and result in the growth or extinction of an enterprise and a new competition structure of the industry. The thesis is not on this level, and it takes the economic network of an enterprise group as research object. The second level is composed of business units inside an enterprise group, where M&A would increase or decrease the core business units and have long-term effect on the development strategy of the enterprise group. The third level is the value chain level of business units, where the asset merger would improve the industrial chain insides a business unit and then improve the efficiency of resource usage of an enterprise. The forth level is composed of the resource nodes in a value chain, where the asset merger on resource elements could response rapidly to the lack or redundancy so that it can sharply improve the enterprise performance. On the other hand, the thesis also works on the effect of M&A activities on the structural reliability of economic network synergy of enterprise group. M&A activities would increase or decrease nodes and relations in an economic network, and then change the structure of the whole group economic network, which would affect the long-term strategies and then the reliability of the economic network.For further description of the effect of M&A on economic network, we use software of social network and complex network to analyze the inter-organization relations inside enterprise-group economic network, for which a case-study framework is proposed. The framework is used to analyze the M&A activities from different aspects.Finally, the thesis adopts these research achievements to study an enterprise group of logistics. The effect of two M&A activities on economic effectiveness and structural reliability of its economic synergy, is worked out. Within practical investigation, we choose 14 subsidiaries and branches as organizational nodes of the economic network, and describe the relations among these nodes in the different stages of its value chain. By the work of connectivity, distance analysis and network density, we try to find out if the foundation of inter-organization resource share is available in the economic network, so as to work out if economy of network synergy could be realized; then analyze the total distance and structural holes to judge if the network structure has changed. To verify the extent of the change, the T test of average-degree distribution is done for the nodes in the value chain after and before M&A. It is concluded that the company's first acquisition based on value chain greatly affects the economic effectiveness of economic network synergy, but little affect the structural reliability of network synergy, while the second acquisition based on business units not only affects the economic effectiveness but also has a great effect on structural reliability of economic network of the enterprise group. This conclusion verifies our research achievements of the different-aspect effect of M&A on economic network of enterprise group.