The Influence Of Network Of Directors On M&a Performance

Wave of Mergers and Acquisitions goes with Business cycle and have some effects on Business cycle.During the economic boom,an increasing number of enterprises expand through acquisitions,Especially higher growth rate caused by the new technical revolution.Company ventures into new industries by buying up businesses in these new industries,because It is a quick and least risky way to get the greatest achievements.In the last hundred years,five Wave of Mergers and Acquisitions happened in developed countries.The sixth Wave of Mergers and Acquisitions centres on China.Technology transfer is one of its core means to fostering the effective capital and promoting capital flow It is very valuable both in theoretical and practical senses to increase economic growth by making the most of The sixth Wave.Based on the summary of M&A theory,M&A behavior theory and social network theory,this paper reviews more theories like New Classical-Keynesian theory,efficiency theory,theory of market forces,neo-institutional economic theories,information asymmetric theory,social resource and social capital theory,the spatial tessellations theory,etc.in addition this paper combs through published literature of research on networks of interlocking directorates and M&A behavior.This article suggests that,On the one hand,the rise of centrality degree index has inhibition to intention of M&A by declining overconfidence.On the other hand,on the premise that merger takes place,the rise of centrality degree index has a positive impact on M&A intensity through relieve the problem of asymmetry of information.Next,this article analyses status quo of domestic M&A,A comparative analysis of M&A by industry revealed that between 2008 and 2015 the number of M&A has witnessed a fast development,the number in 2015 is four times the number of 2008,and the average number of M&A growth from 0.2 in 2008 to 0.36 in 2015.The five top of number of M&A and that of acquisition scale has no intersection point.The manufacturing,social service industry transportation service rank near the top of the number of M&A,but health and social work industry high technology service industry social service industry rank near the top of the average number of M&A.In addition,this paper studies the developmental trajectories of networks of interlocking directorates,this is easy to discover the correlation between the fluctuate of economy and change of networks of interlocking directorates.Most obviously the total number of directors of Chinese listed companies increase from fifteen thousand people in 2008 to thirty thousand people in 2015 which is another evidence that The number of Chinese listed companies is growing rapidly.In order to overcome the deficiencies of statistical description and correlation analysis,Cox regression analyses are performed for further research,Using chinese a-share companies panel data from 2007 to 2015,while financial variables served as control variables.The results of the studyshow that On the one hand,the rise of centrality degree index has inhibition to intention of M&A by declining overconfidence.On the other hand,on the premise that merger takes place,the rise of centrality degree index has a positive impact on M&A intensity through relieve the problem of asymmetry of information.To enhance its robustness,median of centrality degree index is performed to validate model robustness.Besides that,network of independent director system has its own development particularity,this paper also Makes a robustness test to the this network and the theoretical constructs and hypotheses are almost supported.This paper find that the research of M&A intensity,used as a proxy for M&A behavior,enhances the research content of M&A behavior to some extent.Based on the research outcome,the thesis provides some conclusions:first,the higher the centrality degree net of directors,the lower The lower the willingness of listed companies to acquire.second,the higher the centrality degree net of directors,The higher the frequency of mergers and acquisitions of listed companies,third,the higher the centrality degree net of directors,The higher the size of mergers and acquisitions of listed companies.Based on the research outcome,the thesis provides policy advices as follows:Enterprises can optimize the decision-making by leveraging the director's advisory function by rationally building the social network of directors.M&A is the best way for enterprises to achieve diversification in the shortest time,integrating the core technology of other enterprises,optimize their own main business,and realize the value of the market value of enterprises quickly.The manager himself can also learn and improve his or her ability by learning and learning with the experience and practice provided by the director's network.The resources provided by the directors' network can provide relevant knowledge.Among them,independent directors,mostly senior scholars,specialistsof all kinds,leaders,has the most extensive professional knowledge and information.Making full use of the network of directors to promote the dissemination of knowledge and resources between enterprises,and this information helps acquiring firms quickly and accurately find the target company.