On Mergers And Acquisitions Performance Of Network Industry

Since China entering into WTO in 2001, domestic and international Mergers and Acquisitions (M&A) have been surging forward. The domestic capital market was active with frequent M&A transactions. Since international financial crisis in 2008, the corporate M&A have been affected by international crisis, but they still develop quickly. The new industry sector represented by Network Industry indicates the development orientation and it has played important roles in national economy. With the importantance becomes significantly, the relevant research have been widely concerned.Firstly, the relevant theories and works are reviewed. Taking Information Technology Sector for example and employing event study, factor analysis and significant test, the short-term and long-term M&A performance of Network Industry are analyzed empirically based on market efficiency, enterprise scale, science and technology development level, the externality, the synergy and integration and the principal-agent problem. The results indicate that the semi-strong form of Efficiency Market Hypothsis doesn't hold in Chinese Security Market. And for total samples, the short-term performance is significant, but the scale economy doesn't help in long term. Meanwhile, the short-term performance of each sub-sector is able to be improved for the development of science and technology and the network externality, but the improvement isn't significant for shortage of independent brand in long term. Further, although the short-term performance of various types of M&A can be improved for synergy effect, the other type performance isn't improved basically except for vertical M&A. Finally, the principal-agent problem is significant in long term, but the short-term performance is improved which may be caused by the distemperedness of market and the irrationality of investors. According to the conclusions, suggestions are proposed out. Firstly, strengthen the integration affer M&A and increase the scale economy effect. Secondly, encourage the enterprises in Computer and Relevant Equipment Manufacturing and Communication and Service Sub-sectors to merge, so as to promote the development of science and technology and make the network externality effect to be done perfectly. Thirdly, raise the R&D input and develop independent brand vigorously. Forthly, promote resource coordination and allocation to perform synergy effect fully. Finally, establish sound Security Market and instruct investors to be rational.