Economic Analysis Of M & A Behavior

In economics conception, M&A is take-over of property resulting in the transfer of the assets ownership from the target companies to the acquiring one. It speeds up the centralization of assets for the competitive company and thus increases its power. The common criteria divide M&A into horizontal (involved firms are among the same commodity or service producer in the same market), vertical (if a firm acquires either a supplier or a customer) and mixed (among the no relevant business) ways. In a micro level, the rationality of M&A and its products lies in scale economics, which is objectively limited by techniques and management financial affairs, and also lies in reducing relevant costs, diversifying operation risk, etc. On the hand, M&A have its limitation. Besides the boundary of a company we after-mentioned, the analysis of a company scale's limitation can also be assisted by the concepts of stimulation slack, information asymmetry and organization failure. In a macro level, M&A also has its dual character, that is, M&A may enhance social welfare gains by efficiency improving or cause welfare losses by monopoly.From a transition of central-planning economy to a market one, China takes its transitional stage. M&A in china is under the situation of gradually decreasing administrative intervention along with the gradually aggrandizing market force. In this situation, administrative-oriented and administration-market mixed M&A is taking place universally in China nowadays. Among them, the transfer of assets among state-owned enterprises is the typical one. We hold on our standpoint that, the process of M&A should be mainly taken by the market in China. Although there are a lot of difficulties may come across to China, we can look into the prospect of M&A in China: market-oriented mergers will come into reality.Our viewpoint is: it will only lead to the management failure if blindly extending the scale of the enterprises in spite of the restrain of the efficiency and without controlling the boundary.The creative points lie in that: the author makes a further study of the theory about the enterprise boundary that made by Coase. The paper thinks that M&A or...