A Study Of The Performance Of China’s Listed Firm’s M&A

China’ economy grows rapidly rely on high-investment since the reform and opening up. However, extensive investment may cause the surplus in production and have negative effects on the efficiency and profitability of the enterprise. What’s more, it may cause economic crisis. During the transition period, it’s important for China to invigorate the existing stock of resources while the investment slow down. The industries whose ratio of fixed assets to total assets is high may need to be integrated, and merges and acquisitions (M&A) provides a way for them. However, whether performance of enterprise can be improved after M&A is still in debate.This paper tries to analyze if M&A could improve the performance of the enterprise whose fixed assets to total assets ratio is high. Firstly, this paper chooses 183 samples between 2002 and 2010 in A share market and uses principal component method to evaluate the performance of the samples before and after the M&A. Secondly this paper uses paired-samples T test to discusses the influence of non-financial factors on performance of the samples after M&A, and uses multiple linear regression to discuss the influence of financial factors on performance of the samples.Finally, to improve the performance of M&A of the enterprises whose fixed assets to total assets ratio is high, this paper put forward some policy recommendations from both side of enterprises and government. Enterprises should choose the M&A target and strategy wisely, and pay more attention to the integration after M&A. The government should perfect laws and regulations, encourage enterprises to do M&A for the purpose of improving efficiency and profitability of enterprises. Meanwhile, the government should develop the capital market to support M&A..