Empirical Research On The Impact Of Foreign M&A On Enterprise Competitiveness Of Target Companies Listed In China

Since the beginning of the 21st century, foreign mergers and acquisitions are playing a more and more important role in Chinese M&A activities. The foreign M&A events causing the change of control right emerge one after another ceaselessly. Can the foreign M&A promote enterprise competitiveness of target companies? How to evaluate the effectiveness of foreign M&A? These are issues of common concern in academic, political and business circles.Until now, most researches related to foreign M&A focus on two aspects: the motive of M&A and the performance of M&A including the increase of shareholders' wealth of companies and the improvement of firms' operating performance. There are seldom studies providing the reference for target companies' strategic development on the basis of enterprise competitiveness. Because the difference among the sample, time and evaluation index, former study results are widely divergent.After summarizing and analyzing the relative former research fruits, the paper designs evaluation index system of enterprise competitiveness according to our country's situation. Then, it chooses those companies listed in Shanghai and Shenzhen Stock Market whose control rights have been transferred after foreign M&A as the sample and does an empirical research on the evaluation of enterprise competitiveness of samples by comparing the changes of sample enterprises' competitiveness in the years before and after the completion of M&A. Afterwards, the paper divides the samples into different sub-samples according to four classification factors (correlation of M&A, concentration ratio of shares, area difference between acquiring firms, mode of M&A) respectively. On this basis, it makes the comparative study on every couple of sub-samples to observe whether the impact on the enterprise competitiveness is obvious.The results show that enterprise competitiveness of target companies slightly drop in shorter time, but shoot up in longer time, especially the operation ability and equipment level. However, the repayment ability is weakened. Related M&A plays more obvious positive impact on enterprise competitiveness of target companies than non-related M&A. The acquiring firms in Hong Kong area can not promote enterprise competitiveness as effective as acquiring firms in other areas. Agreement M&A promotes enterprise competitiveness more greatly than non- agreement M&A.