With steady rise of Chinese economy after the financial crisis, China has accelerated the pace of mergers and acquisitions, and in particular, the local government intervention played an active role during firms' M&A. In such a context, the author plans to test the performance of such acquisitions by empirical studies. This Paper selected related acquisition events from Shanghai and Shenzhen stock markets which occurred during 2005-2007 as research samples and divided them into two comparison groups as local government intervention during firms' M&A and non-local-government intervention during firms' M&A, Then, constructed a comprehensive index system including evaluation on financial performance and industrial performance. After studying the relevance of industrial performance and M&A industry choice, the author further studied the relationship between local government intervention and M&A performance. Mainly the author draw conclusions as follows: first, there is a significant correlation between industrial performance and M&A industry choice; second, the performance of local government intervention during firms' M&A increased that year, bringing about some effect in a short-term, but sharply decreased after one year; the performance of non-local-government intervention during firms' M&A increased that year, and maintained a substantial increase after one year; whether long or short term, the performance of local government intervention during firms' M&A is not as good as the performance of non-local-government intervention during firms' M&A. |