The Research On The Impact Of Cross-border Mergers And Acquisitions On The Efficiency Of ICBC

Cross-border m&a has become the most important way for domestic banking industry to expand the market, and to realize globalization strategy. The ultimate purpose of the acquisition is to improve efficiency and achieve profitable growth. The impact of cross-border m&a on bank efficiency in the industry has become the focus. It’s very meaningful for domestic commercial banks to study the impact of m&a on efficiency of ICBC which is the leading of domestic bank, and to analyze the way of improving m&a efficiency in the future.The paper focuses on the cross-border m&a efficiency of ICBC and the impact of mergers and acquisitions on its efficiency. First, analysis the the mechanism of the impact of cross-border m&a on the efficiency of bank from the perspective of cost and benefit. Then use DEA method to measure the efficiency of m&a between 2000 and 2013,in order to preliminary analysis the impact of m&a on the efficiency. Then using Tobit regression method to analysis the impact of mergers and acquisitions occur, mergers and acquisitions experience, demurrage and Bank internal factors on efficiency. Then combining the empirical results and all previous m&a events doing case analysis, finally summarize the empirical conclusion, make some enlightenments and recommendations on strengthening the m&a efficiency of ICBC.The conclusion shows that the impact of cross-border m&a on ICBC’s current efficiency is negative. Reasons are different in different m&a events, in summary: m&a motive is not to pursuit short-term financial benefits, payment method limit the flow of funds, lack of experience in mergers and acquisitions, synergistic efficiency can not be achieved in short time, etc.; but after two years adjustment, ICBC can achieve efficiency level, empirical evidence that It is remarkable that m&a events happened in two premerger have positive impact on the current efficiency of ICBC. There is a two years of demurrage on m&a efficiency. In addition, m&a experience is important to a successful merger and have a significant impact on bank efficiency. Overall, the ICBC’s previous acquisitions are successful, it thanks to its long-term strategic planning, timing accurate target positioning of mergers and acquisitions. In addition, studies show that it should have better performance on accumulating more m&a experience, grasping acquisition frequency and m&a integration work.