Industry-level Merger & Acquisition,R&D Expenditures And Stock Expected Returns

In recent years, innovation-driven development strategy has become the major strategic task of China’s national economy, and it has a great significance for national economy. In fact, no matter In fact, whether from increases the chances of m&a innovation technology or patents or from the perspective of stimulating enterprise r&d, active industry mergers and acquisitions generally has a positive effect on enterprise innovation investment, and be responsed on the stock performance. Therefore, industry merger and acquisition activity will not only affect the enterprise R&D investment, but also affect the relationship between R&D and stock expected returns. Furthermore, the differences influence on large and small enterprises can also affect the microscopic mechanism of enterprise innovation investment.Based on the introduction of research background and significance, as well as review of relevant theories, this paper uses the A-share listed firms in Non-financial industries during 2006 and 2014 in Shanghai and Shenzhen Exchanges as sample, we provide an empirical test showing how an active acquisition market affects firm incentives to innovate and conduct R&D, and the different effects on large and small enterprises. Furthermore, the results of this study expect to inspect the relationship between R&D and mergers and acquisitions.Our empirical results show that active industry M&A market is not only the positive influence to the enterprise R&D investment, will also strengthen positive relationship between R&D investment and stock expected return; furthermore, the impact are more evident in the market value of small scale enterprises.The significance of our empirical is that: on one hand, we establish a connection with M&A, R&D and stock returns, on the other hand it help reveal the macro mechanism from industry mergers and acquisitions of enterprise innovation investment.