Mergers And Acquisitions Effect

M & A came to our world as the production of the marekt economy development. Now it plays an so important role in the world economy that there seldom huge companies can grow up without some kind of M&A. Since 1990s, the fifth M&A tide surged in the whole world. For China, we started our second M&A tide already and it is developing quicker and stronger with more influence on our economy. How the enterprises can grow up through M&A and how to provide positive effect on not only the enterprise itself but also the whole society is what we have to study and solve and the result may help us in instructing M&A development,creating conditions to bring its positive effects into play in ChinaThere are many theoretical achievements of M&A and its effects. For example: economy of scale, economization of the transaction cost, promotion of efficiency, ect. In financial theroy there are underestimation of value, information theory and freedom cash flow.For industrial economics, there are optimum of industrial organization structure and industrial structure. The main economical interpretation of M&A effects is the explaination for optimum of resource allocation. Also there are studies in China focusing from partcipators' behavior to the motives,ect. All the theories can bring us good inspiration in exploring the effect of M&A and can instruct us in our real practices. Based on them, this article will extend the range of M&A study and study the M&A effects of resource allocation, the new way in affecting the technology progress and the promotion of economic growhth.