A Study On The Relationship Betwee Government Intervention, Mergers And Acquisitions, Regional Economic And Social Development

In our life, government intervention in business activities is very common. The intervention effect is more significant in Chinese state-owned coporates because of the government as the actual controller of coporates. Copotares always expand themselves through mergers and acquisitions (M&A), which becomes an important way for government intervention in business activities. Now, the researches both at home and abroad mainly focus on microcosmic performance of M&A, but little on social effect. And the study about relationship between government intervention and social effect is more insufficient. Therefore, in view of this, the study built a model to empirically test the relationship between government intervention, M&A and regional economic and social development. The paper selected the basic samples in the M&A events of Chinese A and B listed companies during the period 2000-2010. And then, we added all M&A amounts and numbers of each province as our explanatory variable. The provinces were determined according to the registration place of acquiring firms. Development and Life Index (DLI) was the explained variable. Government intervention and marketization index were also added in the model. The empirical results shew that macro social effect of M&A was very significant, stability of the positive influence; government intervention in the acquisition of state-owned copotates were also of benefit to region development. For further research, we studied the effect of M&A,which were intervented by government,on different aspects. Experimental results proved that the effect on the economic development, wage level and fiscal revenue were positive. These social fields were called "efficient fields" in the paper. On the contrary, the ecological construction, science and technology innovation were "ineffective fields".Marketization index also played an important role in the relationship.