The Influence Of Network Of Independent Directors On M&A Performance Of Listed Companies

Mergers and acquisitions is an important strategic investment activities for enterprise. And it is also an important research object in the international financial field. In recent years, foreign scholars begin to study M&A from the perspective of social network theory. In social network theory, individual behavior is embedded in social network, and it will be affected by various non-economic factors. China is a traditional “relational society”. It is common that economic activities are influenced by social network in China. Existing research shows that there are many chain directors. So this paper chose to study the influence of the network of independent directors on M&A. The result can rich the research about independent directors, M&A and social networks.In this paper, the main line is the influence of the network of independent directors on M&A. It also adds the following factors: the jurisdiction of the province, company size, the nature of ownership and the problem of agency, to investigate the different influence of the network of independent directors on M&A under different circumstances. We select the data of M&A events in China’s listed companies over 2003-2012. After screening the samples, we finally get 2614 valid samples. We use a mixed indexes to measure the network position of independent directors.Through the empirical analysis, the conclusions of this paper include the following aspects:(1) Higher indexes mean more central position that independent directors occupy. Central network position can help independent directors to possess more social capital, enhance their ability of obtaining relevant information about M&A and reduce the risk of the information asymmetry between both sides of M&A, which will improve the M&A performance.(2) When both sides of M&A are located in different province, the social network of independent directors can improve the performance.(3) The influence of the network of independent directors on M&A is more significant for small-size companies than large-size companies.(4) The influence of the network of independent directors on M&A is more significant for non-state-owned companies than state-owned companies.(5) The influence of the network of independent directors on M&A is more significant forcompanies with low levels of agency problems than companies with high levels of agency problems. The result can rich the research about independent directors, M&A and social networks.