The Impact Of Local Government Intervention On Performance Of State-own Listed Company That Occurred Merger & Acquisition

This paper analyzes the motives and effects of local government intervention in state-own listed company M&A, and look into the realistic Institutional background, I believe that institutional reforms such as administrative decentralization and reform of state-owned assets, would make the government had the motivation and ability to intervene state-owned enterprises M&A within its jurisdiction, which has a profound impact on their performance.By empirical studies I test the performance of state-owned listed companies that occurred M&A. The article select companies occurred M&A in 2006 as the study sample. Constructed to evaluate the overall financial performance indicator system, through the 2005-2008 change in corporate performance, and further study the degree of intervention by local governments and enterprises M&A Performance. The empirical part results following conclusions:First, the performance of listed state-owned enterprises increased after the merger, with some short-term effects, but significantly decline in the post-merger performance, indicating that the company ignored integration after merger. Second, it can be found by "the same jurisdiction of" results: two sides of M&A occurred in the same jurisdiction performance better than different jurisdiction, and more pronounced. Third, empirical results by grouping government intervention in the index of various provinces show that the greater degree of government intervention, the worse the performance of listed state-owned enterprises.Based on the above analysis, this paper conclude that only by institutional reform of local government intervention can eliminate root causes of motivation and can ultimately inhibit the intervention of local government. It Also stressed that market model approach should be taken as state-owned enterprises'ultimate goal of M&A. We should position the role of government, and take other measures to encourage the development of M&A market of state-owned enterprises mergers and acquisitions.