Entrepreneur’s Social Capital, The Extent Of Market Opening And M&A Performance Of The Listed Companies

M&A（merger and acquisition）is one of the main ways of external growth,and also a long-lasting research topic in the academia. Researches at homeand abroad have generally considered that the merger of acquired company isof positive performance. However, the influence of the merger of acquiringcompany is a proverbial fence. According to the Resource-Based View, thecompany is the collection of dynamic resources, competence and knowledge,which determines the company’s competitiveness. Therefore, the articlebelieves it is important to obtain appropriate M&A opportunity and arouse thenecessary resources and capacity to insure M&A success. The articleanalyses how the entrepreneur’s social capital affects the M&A ‘s short-termand medium-and-long-term performance, using163samples from the listedcompanies between year2007and year2009.The entrepreneur’s socialcapital may have an impact on the acquisition of information and knowledge ofheterogeneity, or necessary resources while integrating the targeted company.The article defines the entrepreneur’s social capital from the perspective ofprevious experience, including four dimensions: network scale, networkposition, personal reputation and associated relation. What’s more, anentrepreneur can invest his personal social capital by reasonable use oforganizational social capital owned by the listed company he works in. Thismay generate added benefits for the M&A achievement.It is observed that there are significant positive correlation between theCARs and network position, while significant negative correlation between theCARs and associated relation. In addition, the network scale is significantlypositively correlated with the CARs in state–owned samples group. Resultsshow that there are significant and positive correlations between theentrepreneur’s social capital and the short-term performance of M&A, but nosignificant influences on mid-term performance. That’s why the articleintroduces serial indicators of market opening. There are more investmentopportunities in high market opening areas. As a result, entrepreneurs have a greater incentive to mobilize their social relation networks to achieve asuccessful merger, expecting great returns from the growth of enterprises.Using the samples for the empirical research, a significant positive correlationwas observed between the entrepreneur’s social capital and the mid-termperformance of M&A in areas where non-public economy acts well.The theoretic point of the article is that as a form of commodity of laborpower, an entrepreneur will affect the growth of an enterprise in the currentmarket opening environment. Both proper creation and rational managementof social capital will not only raise entrepreneur’s personal ability, but also bringmore opportunities and resource for the enterprise. It will help reduce thesocial barriers and lead to the growth of the enterprise. Another revelation isthat it will help to accumulate the management team’s social capital if ascientific mechanism of talents’ recruitment, selection and training.