The Effects Of Local Government Intervention On Performance Of Stated-owned Enterprises M&A Based On M&A Type

Third Plenary Session of the18th CPC Central Committee points out the reformof economic system is the focus of comprehensive deepening reform, and M&A ofstate owned enterprises is the focus of the reform of economic system. So M&A ofstate owned enterprises is important content of comprehensive deepening reform. ButM&A performance of state-owned enterprises is not optimistic at present. Therefore,how to improve M&A performance of state-owned enterprises becomes a seriousproblem. Due to different M&A type, the M&A effect is different. Therefore, thispaper studies the effect of local government intervention on M&A performance oflocal state-owned enterprises based on the perspective of M&A type, which not onlyprovides empirical evidence for enhancing the performance of local state-ownedenterprise mergers and acquisitions, but also makes a beneficial supplement fordeveloping M&A theory deeply.This paper analyses the effect of government intervention on performance ofdifferent M&A type of local state-owned enterprises by factor analysis method andmultiple regression model. Firstly, obtain research perspective of this paper byreviewing the literatures at home and abroad, and explain related concepts and theoriesof M&A, which lays the foundation for follow-up study. Secondly, find those problemson the basis of M&A status of the local state-owned enterprises. And then, accordingto the factor analysis method this article respectively gets local state-ownedenterprises M&A performance of different type, and separately makes a descriptivestatistical analysis of M&A performance of different type (horizontal M&A, verticalM&A and mixed M&A) under different level of government intervention. Theresearch shows higher government intervention can improve the performance ofhorizontal M&A and mixed M&A，but lower government intervention benefits theperformance of vertical M&A. Next, three types of M&A are substituted into theregression model, and then further study how local government intervention affectsperformance of different type M&A accurately. The research finds government intervention has significant and positive effect on horizontal M&A performance onthird year after the merger, and government intervention has negative impactsignificantly on the performance of vertical M&A on first year after the merger, butgovernment intervention has no significant effect on the performance of mixed M&A.Based on research hypotheses and empirical results, this paper gets the comprehensiveconclusions: lower government intervention is more favorable to improve verticalM&A performance，and higher government intervention can improve the performanceof mixed M&A to some extent. Finally, based on M&A status of local state-ownedenterprises and empirical study results this paper puts forward reasonable suggestionsfrom six aspects to improve the M&A performance of local state-owned enterprises.