Orientation Of Chinese Government Intervention Merger Effects And Functions

Merger and acquisition is an important way to expanse capital and let companiesenlarge quickly. Since the end of the19th century, the world has undergone six masswaves of corporate mergers and acquisitions, and it is of profound significance for theworld economy. With the entrance into the21st century, merger and acquisition inChina presents an unprecedented prosperity in scale and quantity. It has become abooster to change the pattern of economic development, to upgrade the industrialstructure, and to speed up the pace of enterprise internationalization.In the economic transition period of market system, the government functionpositioning determines that the government intervention is an important characteristicof enterprise M&A market in our country. Compared with western countries, thegovernment’s intervention in China’s m&a market has its own characteristics indynamics, mode, effect and so on. And the characteristics of government interventionis decided by our government function positioning in mergers and acquisitions. In thebackground of Government’s functional transformation and reduce the delegate forthe breakthrough, the research of government behavior in China’s M&A market hasmore theoretical and realistic meanings.On the basis of merger and acquisition of companies and governmentintervention theories and literature research, I analyzed the comparative economicsresearch methods of the M&A at home and abroad, the history of governmentintervention. Follow the structuralisms "motivation determines behavior, behaviordetermines the performance of" demonstration frame, I analyzed the reason,institutional background, behavior and the performance of government intervention inmergers and acquisitions, and put forward suggestions about the functions of thegovernment at last.First, I introduced the concept of corporate mergers and acquisitions andgovernment intervention and theory development, combined Chinese and foreignhistory review of company merger wave and the government intervention policy ofM&A behavior evolution, and compare their respective characteristics. Second, Icompared the behavior of the western developed countries and the Chinesegovernment intervention in the M&A motivation from multiple perspective ofdifferent systems and the social environment. Through introducing the theory ofindustrial organization, I made the theoretical basis of government intervention clear,focused on the analysis of government intervention in our company mergers and special system background and reason, summarized our government intervention inmergers and acquisitions of phase behavior and four behavior characteristics. Third, Iexplained why government intervention can’t optimize the resource allocation underthe condition of "North paradox" phenomenon.After a lot of theoretical analysis, a problem arises: what is the economicconsequences of the government’s intervention in reality? I selected the110samplesin the stock market in Shanghai and Shenzhen M&A events during the period2007~2009, uses DID method, chose12variables such as asset turnover, operating profitmargin and so on. The empirical results indicated that the local governmentintervention in the enterprise M&A performed worse in asset growth rate, return onequity, tobin Q performance, so no matter in long-run or short-run, local governmentintervention in the enterprise M&A performance are worse than the nongovernmentintervention of M&A performance.Finally, I summarized the phenomenon that the government plays positive effectin acquisitions, offside and absence of the function orientations. Furthermore, Ianalyzed the mechanism why government offside and absence. At last, I put forwardsuggestions about market environment construction, improvement of social securitysystem, to eliminate discrimination, property protection aspects.