Comparative Study On The M&A Performance Of Listed Companies In National Regions And The Southeast Coast Regions

M&A is an important mean of expanding the enterprise boundary andconcentrating the capital in addition to endogenous development. China is now in acritical period of economic structural adjustment, M&A is crucial to promote theoptimal allocation of resources and rational utilization in the securities market. It isable to meet the need of reconfiguring the corporate ownership structure and stockassets. It has been a hot research whether M&A can improve the enterprise financialperformance. However, it did not form a unified conclusion of the effect of M&A.China is a country that regional economic development is highly uneven. Theeconomic is active in the Eastern coastal regions, in this area, the capital market has arapid development, the factor market and intermediary organizations are perfect, andit has an intense competition among the enterprises. The listed companies have agenerally high level of corporate management and governance, also, Government hasa less intervention to the economy. Enterprises can make independent capitaloperation. However, minority nationality regions are not as good as the southeastcoastal regions in these aspects. In this paper, we make a thorough inquiry of regionaleconomic differences between the minority nationality regions and southeast coastalregions, and probe whether M&A can bring performance enhancement to the listedcompanies in this two areas, in the same time, find which area perform better.Because of the imperfections of China’s capital market and information system,this paper uses factor analysis method to evaluate performance of M&A in2006-2008about listed companies between minority nationality regions and southeast coastalregions. The specifically method as follows: firstly, eight financial indicators arepicked up to reflect the operation, solvency, growing ability and profitability of theenterprises. Then, it uses SPSS to set up M&A performance composite score modelafter data standardization and get the composite scores about5years of the listedcompanies in the two regions. Then study the trends of the five-year, find whetherM&A bring the improvement to the listed companies in the two areas. Same timecompare the two areas and find that gaps between the two areas. Based on the above, we have come to the conclusion that the M&A performanceof listed companies in minority nationality regions decline in the short-term and riseslowly in the long-term; the M&A performance of listed companies in southeastcoastal regions improve significantly in the short-term, but in the long-term somewhatfall; the M&A performance of listed companies in minority nationality regions werenot as good as the southeast coastal regions. We explore the reasons, from a macroperspective, minority nationality regions have a low degree of market. The financialindustry and the intermediary organizations lag behind. Government has moreintervention to the economy. From the microscopic aspects, the listed companies havea generally low level of corporate management and Governance, the integration ofM&A is bad. Accordingly, we proposed some countermeasures and suggestions asfollows: Promote the construction of the national market-oriented process, strengthenthe listed company’s internal management, improve enterprise governance level of thelisted companies in minority nationality regions and give great emphasis on theintegration after M&A.