| With the formation and development of China’s capital market,the market for corporate control of listed companies has gradually been developed.The reform of non-tradable shares in 2005 has profoundly changed the operation basis of China’s capital market,and has played a significant role in promoting the development of the market for corporate control of listed companies.According to the data statistics of database on mergers and acquisitions(M&A)of CSMAR in the paper,it is found that the number of M&A activity of China’s market for corporate control has increased from 8 in 1995 to about 10896 in 2016.Thus,the M&A activity of Chinese companies is developing along the trajectory of the marketization.There have been wave of M&A in the market for corporate control of western companies with the history over hundred years,which plays an irreplaceable role in the adjustment of national industrial structure,the promotion of resource allocation efficiency and the implementation of the company’s development strategy.With the study,researchers have found that the wave of M&A is frequently developed during the period of economic recovery,and comes to the climax before the economic growth has reached the peak;the M&A activity begins to cool down when the economic boom is still in the maintenance;after the activity is in the trough,the economic recession will come one after another.Thus,it can be seen that the state of M&A activity plays warning role in the deployment of the national macro-economic policy and company’s operation strategy.Therefore,the test for hypothesis on wave of M&A of China’s market for corporate control,the research on factor affecting wave of M&A of China’s market for corporate control,the discussion on factor affecting selection of M&A strategy of listed companies and the research on factor affecting M&A performance of listed companies all have a certain theoretical significance and practical significance.Since Nelson(1959)put forward the hypothesis of wave of M&A,western scholars have done a lot of researches on the detection methods.The paper has adopted Markov Regime Switching extensively used by scholars to test the hypothesis of M&A in China’s market for corporate control,which has verified the structural transformation of “high district system of M&A activity” and “low district system of M&A activity” existing in China’s M&A market and that the inversion point is in 2002,and proved that China’s market for corporate control entered the period of wave of M&A in 2002,and is still in such wave.Based on this,the paper also has defined the time domain for future research.With the sort-out and analysis of larger literatures,the paper has found that market to book ratio,as one of method for company valuation,is always favored by western academic circles,and has formed many research results in the research for influence factor on company M&A.These research results are consistent with the view that market to book ratio has driven the gathering of M&A activities,but the reason for such driving is still controversial.From the perspective of new classical economics,the early scholars found that the high market to book ratio has driven the occurrence of M&A activity as market to book ratio is taken as the predictive index of growth opportunity of the company.In the 1980 s,with the emergence of behavior finance,scholars believed that the high market to book ratio might be caused by wrong valuation of market as the capital market was not effective;therefore,the occurrence of the wave of M&A may be incurred by market mispricing.The paper has made descriptive statistical analysis on tendency comparison between the number of deal of M&A in takeover market of Chinese companies and market to book ratio of companies,and it is found that the number of deal of M&A and market to book ratio of company during the period of wave of M&A are basically uniform,and the mean value of market to book ratio during such wave is significantly higher than that during the period other than such wave period.It is preliminarily concluded that market to book ratio has a certain connection with M&A activity of the company.Then,the paper has also made regression analysis on M&A performance and market to book ratio of M&A company during wave period and other period(other than such wave period),and the research found that the market to book ratio has a certain influence on future marketing performance of M&A company and future global stability during the wave of M&A,while there was no such phenomenon during other period.Since then,the paper considers that market to book ratio has affected on M&A behavior of Chinese listed companies,but it is not clear what factors play a role.As for the problem on existence of statistical non-independent information in the market to book ratio,scholars have made many researches,and the common concern is how to avoid the influence of mispricing.Research made by Rhodes-Kropf,et.al(2005)in such aspect has been a breakthrough.They obtained independent measuring information of growth opportunity,mispricing and industrial mispricing,etc.through mathematical derivation on market to book ratio,and made the research on M&A with such measuring information.Then,it was considered that the valuation error has resulted in M&A activity.Based on the research results of Rhodes-Kropf,et.al(2005),the paper has made research on M&A activity of Chinese listed companies.Research contents mainly cover the method selection of consideration payment,the M&A performance,the influence of existence of arbitrage risk on M&A performance and other aspects of M&A companies.In order to build a theoretical framework of research,the paper has combed theories relevant to M&A,such as behavior finance,new classical economics,information economics and enterprise management theories,and extracted and integrated the limited arbitrage theory,prospect theory,signal theory,enterprise growth theory,operating synergy theory and enterprise competitiveness theory,etc.which provide a theoretical basis for this hypothesis.On the basis of the above research,the paper has adopted Logit regression analysis to verify the influence of growth opportunities and mispricing on the strategy selection of consideration payment.Under the framework of enterprise growth theory and prospect theory,the paper is to inspect the verify the influence of market to book ratio,growth opportunity and mispricing derived from market to book ratio,mispricing direction and bias degree on payment method of M&A companies.The research results show that Market to book ratio is the factor that affects the selection of payment method of M&A companies.In the framework of enterprise growth theory,the company will tend to select and use the stock and mixed stock payment strategies based on consideration of future growth opportunities.In the prospect theory,rational manager of M&A company will carry out M&A with stock-for-stock method under the use of over-valuation mistake in the market,so that the purpose of withdrawal of cash could be realized;therefore,the stock and mixed stock payment strategies are more favorable.In addition,with the inspection of decomposition factor of market to book ratio,when the influence on strategy selection of payment,the growth opportunity and positive mispricing both have played a role;therefore,the selection of payment method is the result of combined influence and function of factor of market to book ratio.The time span of influence of positive mispricing on payment method is longer than that of influence of growth opportunity,which indicates that Chinese listed companies are strongly disturbed by irrational factors of the market when making strategy selection of consideration payment.Research of Rhodes-Kropf,et.al(2005)on M&A ended with the influence of market to book ratio and decomposition information on payment method.The paper takes advantages of their research results on market to book ratio,and adopts multiple regression analysis to continue to explore the influence of growth opportunity and mispricing on M&A performance of companies under the framework of neoclassical theory,signal theory,competition theory and behavior finance theory.When the measurement of M&A performance,the multidimensional observation method is used for respective investigation in the four aspects of company’s profitability(with two dimensions of market and operation of shareholder wealth),company’s future growth,company’s running efficiency of assets and company’s operation stability,and with the research,it is found that in the aspect of profitability,the shareholder wealth of M&A company with high Market to book ratio has been increased and has the smaller volatility,which is brought from high growth opportunity to shareholder,and high positive mispricing has helped the shareholder to reduce the fluctuation of wealth.The time span of influence of growth opportunity on shareholder wealth is longer than that of influence of mispricing,which indicates that the above results are mainly from the contribution of company’s growth opportunity.In the aspect of growth,the growth rate of main business after the M&A of the company with high market to book ratio has been improved,which is contributed by the growth opportunity,while the growth rate of main business after M&A of the company with high positive mispricing has been decreased.Under influence of market to book ratio on company’s future growth,two-dimensional factor plays independent role,and the wrong valuation information of market in Market to book ratio will have bad influence on future growth of M&A company.In the aspect of efficiency,the turnover rate of asset after M&A of the company with high market to book ratio has been improved,which is contributed by high growth opportunity.In the aspect of stability,the stability of operation after M&A of the company with high Market to book ratio has been promoted.The stability of operation after M&A of the company with high growth opportunity or high negative mispricing has been advanced,while that after M&A of the company with high positive mispricing has been declined.Under the influence on stability of operation,the growth opportunity,positive mispricing and negative mispricing play the function of associative influence,and such function has attenuation effect,which further shows the complexity of index information of Market to book ratio.The research results show that under signal theoretical framework,the company increases the shareholder wealth and simultaneously reduces the fluctuation of shareholder wealth with release of clear and uniformed signal of high growth opportunity.Under new classical theoretical framework,the company with high growth opportunity promotes the stability of operation with enhancement of competitive position.Under the behavior theoretical framework,the company with high positive mispricing will have the future growth reduced for the company value is stepwise regressing to true value,and then the stability of operation is declined.However,the company with high negative mispricing will have the stability of operation improved for value regression.Arbitrage risk has long been considered as a limiting factor hindering the rational arbitrager in the capital market to correct mispricing in the market.Although the existing researches at home and abroad have empirical analysis on relation between arbitrage risk and factors,including long-term return of stock and dividends release decision,etc.of listed company,no scholar has introduced such concept into the research field of M&A.Therefore,based on limited arbitrage theory and prospect theory of behavior finance,the paper has put the arbitrage risk into the research on relation among growth opportunity,mispricing and M&A performance,so as to verify the regulating effect of arbitrage risk on market to book ratio and shareholder wealth after company M&A and further verify the regulating effect of arbitrage risk on growth opportunity and mispricing decomposed from market to book ratio and shareholder wealth after company M&A.The research results show that the arbitrage risk easily incurs wrong evaluation of investor on growth opportunity of the company in the market,and then the influence of growth opportunity on shareholder wealth after M&A is uncertain.Simultaneously,the long-term maintenance or excessive adjustment of stock mispricing may also be caused,and then,the influence of mispricing on shareholder wealth after M&A is out of expected conditions.In addition,with the comparison of regulating function of arbitrage risk on relation among different components of growth opportunity,mispricing and shareholder return after M&A,the paper has found that the influence of arbitrage risk on long-term share price response and operation performance is higher than that on short-term share price response,and it is indicated that the function of arbitrage risk on company M&A might be fully played with long time interval.The influence of arbitrage risk on market fluctuation is higher than that on market returns,which shows that the main function of arbitrage risk in company M&A is to enhance the uncertainty of performance after M&A.The regulation of arbitrage risk on relation between growth opportunity and shareholder return after M&A is more obvious than that on relation between mispricing and shareholder return after M&A;therefore,it can be concluded that the interference effect of arbitrage risk of Chinese capital market on market judgment of growth opportunity of M&A company is stronger than that on market recognition of mispricing,and accordingly,the greater adverse influence on performance after M&A of M&A company with high growth opportunity will exist.In conclusion,the paper creatively introduces two factors of growth opportunity and mispricing in decomposition model of market to book ratio into the research on M&A,so as to discuss the influence of them on M&A payment decision and performance in the wave of M&A of Chinese listed companies.Therefore,the research thought in the paper could broaden the research perspective of Chinese scholars;simultaneously,the research conclusions of the paper might have a certain guiding function on formulation of acquisition strategy of the company,development of supervisory policy of supervision department and making of investment decision of investor in capital market. |
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