Empirical Research About The Political Background Impact On The Merger And Acquisition Performances Of Private Listed Companies

Since reform and opening up, our private economy obtained a fully development. For themerger and acquisition （M&A）market began and the country eased policies on privateenterprises, more and more private enterprises, driven by profits desire and national policies,lifted the great wave of merger and acquisition. Under the normal market economy condition,M&A of enterprises is paid transaction, taking their own as the main body. But our marketeconomy is evolved from planned economy. So the government is keen to become moreinvolved in M&A of enterprises for making up for the defect of the market economy or for hisown political goals. This presents many uncertainties to M&A of our national enterprises andeven take bad effects on it. This is a normal phenomenon that the government intervenes thenormal business of enterprises. So in order to reduce adverse intervention of the government,enterprises are eager to seek political background to set up political relevance, with the hopeof establishing political influence through political background. Therefore this can have animpact on the government making and carrying out policies and enterprises have acompetitive advantage. Then economic benefits follows. Since private enterprises expandunceasingly, more and more private entrepreneurs become involved in political fields, such asbeing NPC delegate and CPPCC member. It is also a normal phenomenon that private listedenterprises seek political background. Nowadays, while academic circles make the researchon political background, they always focus on enterprise value, making the research onenterprises with political background can get more preferential on financing, taxes andperformance. Less scholars make the research on the relationship between politicalbackground and M&A performances from the angle of M&A. Taking M&A data of124private listed enterprises in Shanghai and Shenzhen from the period of2006to2007as thesample and manually collecting political background information of sample enterprises, thepaper is based on level of involvement of political background and the strength of politicalbackground to empirically test the relationship between political background and M&Aperformances with the method of multiple linear regression so that new ideas are initiated forthe research of political background, theoretical foundation can be provided with M&A ofprivate enterprises and M&A performance can be improved.