Earnings Management And Market Response Of M&A In China Listed Companies

Since 90's in 20 centuries, the stock market of our country develops more and more and quickly, it has a substantial progress in listed company amount, in the market capacity, traded means and supervise rule etc. At this period, as growth and social resource of the business enterprise capital install effectively, M&A has become a effective way for the listed companies to integrate resources and expand at a low cost. From the beginning of"BaoYan dispute"it was the first M&A example in our country, the M&A activity is more and more active in stock market. Because of the economic system and other history reasons, appeared the earnings management which management layer manipulated profits, it result in the great quantities loss, so nation set some policy rules to norm listed companies'M&A activity.The paper set out the earnings management and M&A theories, wants to discuss these problems:(1)Does the listed companies which have M&A have earnings management behaviors in M&A process ? (2)Under different circumstance, how is the earnings management? (3)How is market response for the news? (4)Can the investor detect the earnings management?"we carry on Substantial evidence research. This paper takes 83 takeover listed companies as the samples in 2006, examines the degree of discretionary accruals by d Jones model and modified Jones model. The result expresses that there is significant downward earnings management before takeovers for the listed companies which they sale Company ownership of share negotiability. And then the sample are be grouped by transfer comparison and concentration ration of shares, the result show that the transfer portion more big, the company carries on earnings management's degree more deep, the concentration ration of shares more big, the company carries on earnings management's degree more deep. This paper also researches the market response after the news announcing. This paper used event study methods to study the market response to M&A. The result illustrates, the investors are aggressive to the news, and the news may be reveal in advance. According the group about market response, when the transfer comparison more than 30% the market response have a direct ratio relation with surplus management clearly, under this kind of circumstance, the investor can find the earnings management. Finally this paper analyzes the problems that the listed companies are faced in the process of M&A and has put forward relevant policies and suggestions.