Assets Appraisal Institutions In Mergers And Acquisitions:Based On Industry Perspectives

The development of medium organization can promote the economic growth efficiently and orderly.A goal of government and regulator is to construct a fair,independent and healthy market of medium organization.The assets appraisal institution is an important participant at capital markets.It plays a critical role in the transaction of the capital markets.M & A and Restructuring,is a foundational and central part of the capital markets.It�s a critical factor to support the development of the capital markets.Assets appraisalis a key procedure in M & A and Restructuring,.The accuracy and impartiality of an assets appraisal report is a precondition that insures the success of the M & A and Restructuring,.More importantly,a pricing of the M & A and Restructuring,is affected by the results of the assets evaluation.However,assets appraisal does not get enough concerns among the scholars,practitioners and public comparing to other procedures of the Merges and Acquisitions.The results of the assets appraisal may be influenced by the behaviors of the assets appraisalorganization,since the assets appraisal institution is a subject of the assets appraisal report.The inappropriate behaviors of the assets appraisalorganization may increase the risk of the Merges and Acquisitions.On the other side,a selection of the company may impact the behaviors of the assets appraisalorganization.Therefore,studying the questions of which factors that influence the company�s selection of the assets appraisalorganization and how the selection behaviors of the assets appraisalorganization affect the risk of the Merges and Acquisitions is of theoretic and realistic significance.Recently,many researchers have focused on the questions of the selections among the medium organizations.There are a lot of research achievements about the selections among the medium organizations.Scholars at home and aboard have analyzed the selections among the medium organizations in three aspects,which include the agency cost theory,the signal theory and the insurance hypothesis.According to the opinion of the agency cost theory,scholars confirm that independent auditing is an external governance mechanism of a company.Companies which have high agency costs would choose the high-quality auditors.Based on the signal theory,scholars consider that the company may send a signal to externality through the selections of auditors.Companies with high risk or good new may choose the high-quality auditors(Titman and Trueman,1985;Datar et al.,1991).Based on the insurance hypothesis,scholars recognize that audit not just send signal to the outside world,but also insure company from contagion effects.The company�s stock price may be decreased when the audit of this company bankrupts(Menon and Williams,1994;Hillison and Pacini,2004).However,we know little about the selections of the assets appraisalorganizations.Therefore,this paper investigates the selections of assets appraisalorganizations at the procedure of Merges and Acquisitions based on the aspect of industries.Firstly,this paper combines sociological theory and psychological theory to study the peer effects of assets appraisalorganizations� selections.How do the selections of assets appraisalorganizations in the same industry affect a company�s selection? Secondly,we test the influences of the property rights of enterprises,product market competition,marketability degree and issue of enterprise value assessment criteria on the selections of assets appraisal institutions.Thirdly,based on the circumstances of China,this paper investigates the relationship between the product market competition and the selection of assets appraisalorganizations.This paper also investigates the mediation roles of property rights of enterprises,stock price synchronicity,cross-listed in different region and issue of enterprise value assessment criteria.Finally,this paper investigates the roles of the relationship between supplier and customer on the assets appraisalorganizations� selections.This paper also studies the main and mediation roles of the property rights of enterprises,the stock price synchronicity,the share holding of CEO,the audit of accounting firm and the development of product market.Data basing on M & A and Restructuring,are cover the period from 2011 to 2016.Empirical results show that:1.The selection behavior of assets appraisalorganization has peer effect.This peer effects decrease when product markets compete fierce and the degree of marketization is high.This peer effects may enhance for state-owned companies.This peer effects increase after the issue of enterprise value assessment criteria.2.The competition of product market is negatively related to assets appraisalorganization�s selection.State-owned,cross-listed in different regions and the issue of enterprise value assessment criteria may decrease the relationship between the competition of product market and assets appraisalorganization.However,Higher stock price synchronization may enhance the relationship between the competition of product market and assets appraisalorganization.3.The relation between supplier concentration and the selection of assets appraisalorganization is inverse U shape.Customer concentration is negatively related to the selection of assets appraisalorganization.State-owned may enhance the relation between supplier concentration and the selection of assets appraisalorganization.State-owned also increase the relation between customer concentration and the selection of assets appraisalorganization.Low stock price synchronicity may enhance the relation between customer concentration and the selection of assets appraisalorganization.However,high stock price synchronicity may enhance the relation between supplier concentration and the selection of assets appraisalorganization.Low share holding of CEO can increase the relation between supplier concentration and the selection of assets appraisalorganization,it also increases the relation between customer concentration and the selection of assets appraisalorganization.A company which is audited by the top four accounting firm has no effect on the relation between supplier-customer concentration and the selection of assets appraisalorganization.High degree of product market development can increase the relation between the customer concentration and the selection of assets appraisalorganization.There are five contributions in this paper: firstly,this paper enriches the research of the medium organization.Prior literature focused on the area of auditor selections,very little literature has studied the selection of assets appraisalorganization.This paper is the first literature that study the selection of assets appraisalorganization.Therefore,this paper has expanded the research of medium organization to the research of asset evaluation.Secondly,this paper has expended the research of peer effects.Present literature has studied the spillover effects and contagion effects in peer from the aspect of corporate bankruptcy,restatement of financial report,information disclosure.Thirdly,this paper enriches the research of Merges and Acquisitions.Prior literature has focused on the research of performance of Merges and Acquisitions,reputation of Merges and Acquisitions and appreciation of Merges and Acquisitions.Very little literature has researched the topic of the roles of assets appraisalon the pricing of Merges and Acquisitions.This paper studies the selection of assets appraisalorganization basing on the aspect of Merges and Acquisitions,which enhance the effects of assets appraisalon Merges and Acquisitions.Our research also enriched the study of Merges and Acquisitions.Fourthly,this paper expands the research of competition in product market.Prior literature has studied this topic from the aspects of information disclosure,earning management and agency costs.Although,little literature has studied the competition of product market basing on the medium institution.Therefore,this paper studies the competition of product market and the selection of assets appraisalorganization,which has enhanced the research of product market in medium institution aspect.Finally,this paper expands the research of the relation between suppliers and customers.Prior literature has studied this topic from the aspects of business strategy,enterprise risk and enterprise performance.This paper studies the roles of supplier customer relationship on the selection of assets appraisalorganization,which expands the research of suppliers-customers.This article not only has the above theoretical contribution,but also has important practical significance: First,this article is conducive to deepen the cognition of the capital market participants to the assets appraisal institution.At present,the capital market participants in our country lack the cognition to the asset appraisal institution,So as to ignore the impact of asset appraisal on M & A and Restructuring,.This paper puts forward the mechanism of asset valuation and assets appraisal institution on M & A and Restructuring,and deepens the cognition of capital market participants to assets appraisal institution and asset evaluation.Second,this article has enlightenment on promoting the standardized and orderly development of asset valuation industry.Therefore,the government and regulators should make the corresponding regulatory mechanisms to reduce the probability of collusive behavior of assets appraisal institution and companies,and effectively promote the assets of the assets assessment agencies and companies.This article finds that collusive behavior of assets appraisal institution and companies is one of the important reasons that affect the normal and orderly development of assets appraisal institution.Evaluate the orderly development of the industry.Thirdly,the research in this article has important policy enlightenment on how to reduce the risks in M & A and Restructuring,and reorganization and to ensure the stable development of our country�s M & A and Restructuring,market.This article reveals the influence mechanism of asset valuation agencies' selection behavior on M & A and Restructuring,,which provides an effective regulatory direction for supervision departments to supervise M & A and Restructuring,.Fourthly,the research in this paper provides a way for M & A and Restructuring,related parties to effectively avoid the risk of M & A and Restructuring,.This article finds that the company is more likely to collude with low quality assets appraisal institution.Therefore,the related parties of M & A and Restructuring,should pay more attention to the assets assessment agencies selected by the company,especially for the assets appraisal institution ranked lower,Multi-party investigation of the target company,a reasonable prediction of corporate value,to avoid the risk of M & A and Restructuring,.