A Comparative Study On Performances Between Listed Companies' M&A By Domestic Enterprises And Them By Foreign Capital

In recent years, the M&A market of listed companies in our country developed rapidly. No matter the M&A of listed companies by domestic-investment enterprises, or by foreign enterprises has emerged as the rapid development momentum, which has a profound impact on China's capital market and the national economy. Research on M & A of listed companies in academia is gradually increasing. The development stage of research is very similar with the M&A market development process. Through the literature review the author found that previous studies are targeted at any particular type of M&A and there aren't comparative studies about economic performances of M&A between the M&A of listed companies by domestic-investment enterprises and companies the M&A of listed companies by foreign enterprises. Therefore, this paper takes the two kinds of M&A events of listed companies as samples and uses factor analysis method and the wilcoxon rank sum test to analyze the efficiency of two types M&A events.The research shows that the economic performance of listed companies mergered by foreign enterprises declined in the two years after the merger performance, although this decline is not statistically significant. Overall, foreign acquisition failed to bring about significant improvements in performance of listed companies. The first year performance of listed companies after the merger by domestic enterprises has significantly improves and continued until the third year. But the third year performance has a significant decline compared to previous two years, which shows that the long-term sustainability is not enough. Through horizontal comparison we found that the advantages of domestic samples than foreign samples in financial performance have disappeared until 2004. It shows that to some extent the M&A by domestic enterprises are more efficient than them by foreign capital.Therefore, we should not blindly worship to the role of foreign investment in China without considering the long-term economic development. We must be rational and comprehensive to view the relationships between foreign capital and our capital market or economic development. We must guide and regulate mergers and acquisitions of listed companies reasonably. Then the M&A of listed companied play the role of performance improvement, the rational distribution of resources and industrial structure optimization.