Impacts Of Corporate Nature Of Equity And Institutional Investor On M&A Performance

In recent years, China’s M&A market continues to heat up, both the number of deals and the scale have made a breakthrough. Institutional investors in capital market are also becoming active and growing. In2015, the state-owned enterprise reform and restructuring once again attract the market attention. Taking into consideration the possible differences between state-owned enterprises and non-state-owned enterprises in many aspects, such as principal-agent problem and institutional investors’governance effect, this paper begins with research of M&A, and analysis the impacts of corporate nature of equity and institutional investor on M&A Performance.Previous studies mainly considered separately the impacts of corporate nature of equity and institutional investors on M&A performance, without taking into account the fact that the impacts of institutional investors on M&A performance might be different between two types of enterprises. This paper will use M&A as the external corporate governance mechanism as the research starting point, and analysis the interaction of enterprise nature of equity and institutional investors on M&A performance, in order to continue to promote the reform of non-tradable shares, to reduce the internal control supervision, to develop the supervision of external governance mechanism, to understand the role of institutional investors at present situation, as well as enrich related research concerning the role of institutional investors on the corporate governance.This paper uses M&A listed company in year of2009to2011as the research object, and uses the factor analysis method to comprehensively evaluate the financial ratio index system to measure M&A performance, and analysis both the variation trend of the performance before and after M&A of listed companies and M&A performance differences between state-owned enterprises and non-state-owned enterprises. Then, using multiple linear regression method, gradually introduce nature of equity, institutional investors, and the product of corporate nature of equity and institutional investors in the regression model to study their effects on M&A performance. This paper selects three measures as proxy variable of institutional investors, including the proportion of institutional investors, institutional investors’stake divided by the first big shareholders’stake and the type of institutional investors.The study found that the trend of performance of listed companies before and after the merger and acquisition is showed "M", and most companies’M&A performance level after the M&A is lower than before the M&A. There is a certain degree of loss in enterprise value. Compared with the non-state-owned enterprises, state-owned enterprises did not appear "inaction". Instead, their M&A performance are significantly higher than that of non-state-owned companies. Institutional investors have positive effect on M&A performance, especially for non-state-owned enterprises. Increasing the proportion of institutional investors and institutional investors’ stake divided by the first big shareholders’ stake will improve the business performance after M&A.