Analysis On Wealth Effectiveness Of The Foreign Capital Merging And Acquisitioning The Chinese Listed Stock Companies

Analysis on Wealth Effectiveness of the Foreign Capital Merging and Acquisitioning the Chinese Listed Stock CompaniesAs more Chinese laws and regulations pertaining to foreign mergers and acquisitions into effect, transnational M&A in our country are booming and taking place. It will exert an increasingly profound influence on the development of the country's economy. Therefore, it's necessary to study on the effect after M&A. And be advantageous to the business enterprise to carry on the decision, on the other hand also provide the basis for the government to make laws and regulations.This paper systematically analyses the foreign capital merging and acquisitioning (M&A) the Chinese listed stock companies from theoretical and empirical point of view. In the theoretical analysis make use of the western microcosmic theories of M&A motivation to analyses on the motivation of the foreign capital. From currently the example take place to see, all of it embodies the strategic motivation of the foreign capital and belonging to the good intentional M&A. It will be proved in the next chapter. In the empirical analysis, this paper selects all cases of the foreign capital merging and acquisitioning (M&A) the Chinese listed stock companies from 1995 to 2003 and does empirical analysis on the wealth effectiveness by focusing on both the short-term and long-term periods. The event-analyzing method is adopted to do the short-termstudy. The result shows that M&A transacting activities could bring about 2.53% cumulative average abnormal returns to the stockholders 40 days before and 10 days after M&A. In the whole selected period, however, the cumulative abnormal return of the stock price in an overall view is not obviously shown. For the long-term study, the paper adopts primarily such techniques as the factor-analyzing, Wilcoxon rank and testing. The results shows that during the 5 years of the selected study period, the financial index of the Chinese listed stock companies have improved considerably. Finally, the paper offers some policy suggestion for the future development of the foreign capital merging and acquisitioning the Chinese listed stock companies.