A Study Of The Local Government's Intervention On Listed Companies' M&A

With the advancement of marketization,M&A activity on our country's capital market had intensified.M&A can optimize the allocation of resources for the enterprise and achieve rapid expansion,but bring huge risks at the same time.At present,our country is in the economic transition period,the market economy system is still under the government intervention.The local governments have the double identity of social management and state-owned asset owners,which determines the ability of local government intervention in the local state-owned enterprises M&A decision,and the complexity of M&A motivation.However,these interventions is inconsistency with the shareholder interest maximization goal,and bring serious damage to the enterprise M&A performance.For this situation,many domestic scholars has carried on the research about the theory of western M&A,but due to the difference of the institutional environment,M&A theory from western countries can not be applicable to the actual situation of our country.So the research on the impact of local government intervention to the state-owned listed company's M&A is of great significance in promoting the development of domestic M&A theory.The paper,based on the characteristic of China,takes 160 listed companies'M&A activities in 2010 as samples,using binary logistic model,DEA-Malmquist index model and Wilcoxon test to study the impact of the local government intervention to state-owned listed company's M&A type and performance.The conclusions are listed as follows:First of all,when the degree of local government intervention is stronger,the local state-owned listing corporation are more inclined to take non-related and local,and there 's no significant correlation between the non-state enterprise regional mergers and the intensity of government intervention.Secondly,the whole M&A performance,the non-affiliated M&A performance and the local M&A performance of state-owned enterprise are worse than the non-state enterprises.Third,local government intervention is negative correlation to the local state-owned listing corporation's M&A performance.Finally,under the impact of the local government intervention,the internal governance factors of local state-owned listing corporation did not bring significant improvement to the M&A performance.In short,local government intervention not only affect the M&A type,but also damages of state-owned enterprise M&A performance.Therefore the author believes that only when we continue to standardize the supervision of the local government,strive to improve the operational efficiency of state-owned enterprises and improve the governance structure of state-owned enterprises,will we effectively prevent the occurrence of government intervention,and promote the value of the company.