| The rapid economic growth of a nation cannot do without the high-speed development of each enterprise in the market.As the main and the smallest business unit in market economy,an enterprise drives changes and developments of the market economy of a nation.In the west,merger and acquisition(M&A)has been an important approach and a common strategy for enterprise development.In China,M&A has also been playing a significant role in the rapid development of market economy since reform and opening up.However,there are far fewer M&A cases in enterprise management practices in China than in the western developed countries,due to the high uncertainty and de-normalization caused by the problems left over by the historical shackles of the planned economy.Accordingly,China also lags behind western countries regarding the research on M&A.Pharmaceutical companies have a natural tendency to M&A,for that they are more dependent on the speed and scale advantage of research and development.Therefore,M&A research is especially important for pharmaceutical enterprises.Based on enterprise behavior theory,many scholars further put forward that enterprise organization behavior is affected by aspiration,that is,the management decides on enterprise behavior after assessing performance aspiration gaps.Despite the fact that a large number of scholars believe that the risk-taking behavior of an enterprise is affected by its aspiration,there still exist two opposite explanations about the exact relationship between them.The first explanation is based on prospect theory.Prospect theory argues that when facing determined profits,people usually prefer a risk-avoiding strategy.When the actual performance is above aspiration,the enterprise chooses to lock in profits and avoid risks;when the actual performance is below aspiration,the enterprise tends to take risks to reverse the dire situation.The opposite explanation is based on expectancy theory.People's choice depends on their expectations about future profits,that is,the choice of the present is the sum of value of all future probabilities.From the reality of enterprise management,when the actual performance is above aspiration,the enterprise has stronger risk-taking ability and is more willing to take risk-bearing behaviors;when the actual performance is below aspiration,the enterprise faces greater pressure of survival and bankruptcy,thus be more willing to avoid risks.This paper argues that the seemingly contradictory explanations offered by expectancy theory and prospect theory should be derived from their different theoretical boundaries.The application basis of expectancy theory or prospect theory depends on the referential standard of aspiration.If the enterprise management stands in an objective and rational position to judge the enterprise's actual performance according to its historical aspiration,the management will determine the enterprise's risk-taking ability based on the gap between the actual performance and the historical aspiration,and then make the decision of M&A by the logic of expectancy theory.If under pressure of industry comparison and capital market,the management will assess the actual performance by social aspiration and market aspiration and be influenced by external pressure and the principal-agent mechanism,then make the decision of M&A by the logic of prospect theory.Therefore,the performance aspiration gap in this paper,has been further subdivided into three types according to respective referential standards:historical performance aspiration gap,which is benchmarked against historical average performance;social performance aspiration gap,which is benchmarked against industrial average performance the same year;and market performance aspiration gap,which is benchmarked against average performance aspiration from industry researchers in capital market.Based on this reclassification,the paper collects data of China's A-share listed enterprises in the pharmaceutical industry from the year 2009 to 2013,comprehensively adopts fixed effects regression of panel data,GMM regression and robustness test,to verify effects of different performance aspiration gaps on enterprise M&A activities.Historical performance aspiration gap,which is benchmarked against historical average performance of the enterprise,is a specific and objective background reflection of the enterprise,and completely independent of the enterprise managers' cognition and the pressure from shareholders and other stakeholders.It is an objective and real reflection of the current operating conditions of an enterprise.Therefore,the management can determine the actual operating conditions through the gap between actual performance and historical performance,to select risk-taking behavior and strategy.The better current performance is the stronger ability and confidence the enterprise has to undertake strategic risks and carry out M&A.Nevertheless,it is not supported by data.However,for social or market performance aspiration gap,it is benchmarked against the industrial average performance aspiration or average performance aspiration from industry researchers in capital market,which represents the performance of the entire industry or the performance requirement from the capital market.When making strategic decisions,the management is inevitably influenced by the pressure from shareholders,investors and other stakeholders in the capital market.If the enterprise performance level is below the average of the industry,or cannot meet the market's requirement of capital return rate,the only solution is to carry out high-risk M&A trying to quickly boost performance.So,the bigger the social or market performance aspiration gap is,the more likely the enterprise managers are to take M&A strategy.At the same time,the influence of performance aspiration gap on M&A strategy may also be affected by social network.Therefore,this paper further examines the influence boundaries of corporate social network on M&A strategy by introducing two factors:the number and heterogeneity of shareholders networks.From the point of the number of shareholders networks,the more social networks an enterprise has,the more information,knowledge and resources it can provide.The empirical studies show that the shareholders in the enterprises of the network more,the influence of performance aspiration gap on M&A strategy is stronger in those enterprises with more social networks.From the point of heterogeneity,the stronger the consistency of enterprise social network is,the higher heterogeneity of information,knowledge and resources it can provide.Therefore,for those enterprises with high heterogeneity of shareholders networks,the probability of M&A caused by performance aspiration gap is even higher.Based on literature review,theory building and empirical results summarized the paper further sums up the main theoretical contribution and guiding significance of this research.First,this paper confirms different influences of different performance aspiration gaps on M&A coordinating the contradiction of prospect theory and prospect theory,which has an important role in guiding enterprise managers to make suitable strategic decisions based on performance aspiration gap.Second,this paper is the first exploratory quantitative study on social network heterogeneity,incorporating into the research framework the heterogeneity and the number of social network at the same time.It does not only expand research dimensions for the social network theory,but also reminds the pharmaceutical enterprises of attaching greater importance to the social network maintenance and development.Third,this paper enriches the theoretical foundation of M&A researches,especially the M&A in pharmaceutical industry,which has vital significance for the pharmaceutical enterprises in China.Finally,the paper also points out future research directions.The first direction is to examine the influence different performance aspiration gaps have on other business strategies besides M&A.In this paper,it is proposed that historical,social and market performance aspiration gaps have different influencing ways regarding enterprise M&A strategy.Based on the logical inference of the same type of risk?taking,this paper argues that other strategic choices affected by risk-taking willingness.such as internationalization,R&D spending,will be affected by performance aspiration gaps.Topics related are worthy of further research.The second direction is the influence of social network heterogeneity on enterprise strategic decisions.Theoretical derivation and the research conclusion of this paper have shown that the knowledge,information and resources that different social network nodes provide for the central enterprise are so different that higher degree of social network heterogeneity provides knowledge that is more comprehensive,information and resources for the central enterprise.This cause-effect model of social network heterogeneity can be generalized to other decision-making areas.Therefore,this paper proposes that it is necessary for future studies to incorporate social network heterogeneity as an independent variable,to study its influences on enterprise diversification,internationalization,strategic alliance,and the implementation status of corporate social responsibility,etc. |
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