Impact Of Financing Constraints On Mergers And Acquisitions Research

The main substance of this article is about impact of financing constraints on mergers and acquisitions. Accounting to agency theory, information asymmetry theory, pecking order theory and internal capital market theory, combining financing constraints and mergers and acquisitions review from external and internal, this article analyses data about mergers and acquisitions listed companies which are listing in Shanghai and Shenzhen Stock Exchanges between the years of 2004-2007. It combines the background of China's national conditions, the use of Pearson and multivariate liner regress methods of analysis, testing the impact on financing constraints to corporate mergers and acquisitions. The main research is on whether the financial constraints as the impact of the factors driving mergers and acquisitions and whether financing constraints reducing after mergers and acquisitions.Through the merger and acquisition of companies to invest in cash flow sensitivity analysis, the results showed that:the merger companies exist invest-cash flow sensitivity, regardless of the events before and after the mergers and acquisitions, financing constraints is a strong correlation on invest cash flow sensitivity. The reason of merger is about financing constraints in steady of manage opportunism theory. This indicate companies are facing financial constraints is always the problem. However, through cash flow and cross-dummy variables by item analysis, we find after the events in the mergers and acquisitions, corporate financing constraints to reduce. So mergers and acquisitions of enterprises ease the financing constraints and support this theory that the financing constraints can drive mergers and acquisitions.