The Equity Characteristics And The M & A Efficiency Of Chinese Listed Companies

Since China's economic reform and the establishment of socialism economic market system, merge and acquisition (M&A) has became the most important means to stimulate firms' competition and growth. The treatise about "constitute cross-region, cross-industry, cross-ownership, cross-country competitive super corporate conglomerate with capital" in the report of the fifteenth Communist Party provides new opportunities to security market, and M&A waves boomed.On the developed markets, M&A brings great cumulative abnormal return (CAR) to the target, but CAR is very little in China. This paper tries to throw some light on this question from corporate ownership characteristics, which is the fundamental and most important aspect of corporate governance mechanisms.Because of the special institutional background of China, the empirical results are: a. the more administration expenditure incurred after M&A, the more benefits received from control rights for SOEs, compared to that for non-SOEs'. Therefore the M&A of non-SOEs is more efficient than SOEs'. b. The more related transactions taken after M&A, the more the benefits derived from control rights for non-SOEs, compared that for SOEs'. In the sense, the M&A of non-SOEs is less efficient than SOEs'. Furthermore, the less difference of shares between the largest shareholder and other shareholders who control more than 10% of the target after M&A, the less the private benefits of control of the largest shareholder, and the more efficiency of M&A.Under the macroscopic background of nation revival and economic growth, China's M&A market will be bound to develop for the long run. This paper empirically investigates the causes to the low efficiency of China M&A market from perspective of ownership structure. It is hoped that the conclusions derived in this paper can make some contributions to the development of M&A theory. What's more, it is hoped that this paper can invoke some thoughts on how to promote efficient M&A and supervise inefficient M&A.