Research On The Factors Affecting The Location And Industry Of M&A

In recent decades,with Chinese economic growing rapidly,China transformed from a low-income country to a middle-income country,however,the contradiction and risk got prominent further at the same time:the growth rate of economic shifts,structural adjustment becomes difficult and the pressure of economic downturn increases.In result,how to transform the economic development mode,carry out economic restructuring and avoid falling into middle-income trap become a practical problem for China.In general,the main problems of our economic growth are some unbalanced and disharmony contradictions,of which the most prominent are industrial structure and region structure are unreasonable.One of important determinant of the situation of industrial and region structure is capital distribution among different industries and regions.From the macroscopic views,the conglomerate M&A and inter-province M&A are the redistribution of stock capital among different industries and regions,from the microcosmic point,they are important tools for enterprises to break through the regional and industrial barriers,gain new market and achieve business diversification.At the same time,as one of important government regulation and control policy tools,the preferential tax policy can change tax burden of enterprises in different types of mergers and acquisitions to guide the mergers and acquisitions of enterprises,thus optimizing the allocation of capital in different regions and industries,achieving the purpose of adjusting the economic structure.This paper starts from mixed mergers and conglomerate mergers in the micro perspective,using probit regression method and merger cases of listed companies in China A shares from 2011 to 2015,empirically analyzing how macro regional and industry tax burden effect micro enterprises mergers and acquisitions investment decisions,and lead to redistribution between regions and industries in the stock of resources then adjusting macro-economic structure.At the same time,due to the guiding effect of macro tax burden on M&A varies because of the regional investment environment,economic agglomeration,industry profit margins,the nature and the relevance of the enterprises,so the research in this paper also considered the interaction between tax and non-tax factor.The study found that,first of all,the regional and industry tax burden will affect the possibility of cross-province and conglomerate merger.At the same time,the probability of cross-province M&A will change according to the regional investment environment,agglomeration,the nature and the relevance of the enterprises.The probability of conglomerate M&A will change according to the profit margins of industry,the nature of the enterprises;Finally,the regional investment environment,the nature of the enterprises will change the sensitivity of the possibility of cross-province M&A to the regional tax burden.Similarly,the industry profit margins,the nature of the enterprises will change the sensitivity of the possibility of conglomerate M&A to the industry tax burden.In the long run,in order to promote the fundamental adjustment of the economic structure,the government should make different tax and non tax policy based on the regional,industry and enterprise heterogeneity.It is important to make efforts to enhance the agglomeration degree and improve regional investment environment,promote value of products in strategic industries,improve the industry profit rate level based on the middle and west area preferential tax policies.