Empirical Study On Performance Of Foreign M&A Of Listed Companies

In the last decade,promoted by the economic system reformation and constantly opening to the outside world of our country,China with huge domestic market and inviting development potentiality becomes the focus that transnational enterprises fight for gradually,and there are more and more cases of transnational merger and acquisition among the listed Companies of our country.So there is a new trend in the merger and acquisition of listed company of our country:The foreign capitals acquisitions boom in the listed company of our country gradually.Accession to the WTO and proclaim of a series of regulation allowing the foreign capitals acquiring the Chinese listed company made the foreign capitals acquisition already became the main way of direct investment in China,and will be one of the mainstreams in merger and acquisition of our country unavoidably.Allowing and encouraging the foreign capitals to acquire the domestic listed company is an important action which is able to accelerate the development of capital market,restructure the economic of enterprise and bring about a promotion in the economy of our country.The foreign businessman,through acquiring the listed company of our country,can utilize the production capacity and existing market of the merged enterprise directly,launch the international business rapidly,and realize the globalization development strategy.At the same time,the domestic listed company can fully take advantage of the foreign advanced technology and experience of management after uniting with the foreign corporations.Therefore,the foreign capitals acquisition is favorable to the both sides in merger.But the foreign capitals acquiring listed company of our country still have a lot of problems in practice,does M&A by foreign capital really improve the performances of target corporations? For this purpose,this paper makes the empirical study on performance of M&A by foreign capital of China's listed corporations.In this paper,we review the common M&A theory and the methods about M&A performance theory.On the base of the review,considering the specific situation of Chinese securities market,we analyze the developing course,the characteristics and the main modes of listed corporation by foreign capital and the performance of M&A of listed corporation by foreign capital.In empirical research part,we try to collect the stylebooks of M&A of listed corporation by foreign capital which happened from 1995 to the end of 2005,choose 11 major finance indexes which measure operation performance of listed corporation,and establish the performance evaluation index system.And we use Principal components analysis Methodology to analyze these stylebooks,compute composite score of finance index,and compare the scores after M&A to it before M&A in order to research the performance of M&A of listed corporation by foreign capital. According to the results of the research,in general,the performance of listed companies of M&A by foreign capital rises and then falls;Accounting to different modes of M&A, the mode of acquiring state-owned shares or legal person shares by agreement on behalf of the direct acquisition is superior to the mode of the indirect acquisition through the parent company or holding company on behalf of the indirect acquisition,the trend of other models' performance is unstable because other models include both direct acquisition and indirect acquisition.Finally,on the basis of theoretical and empirical research,we obtain some useful results.We believe that these results will provide valuable reference to the government, listed corporations and investors.