The Relationship Between Economic Cycle,the Types Of Mergers And Acquisitions And Mergers And Acquisitions Performance

With the establishment and development of Chinese market economy system,market competition has intensified.In order to improve the market share,enhance core competitiveness,enterprises will use mergers and acquisitions(M&A)to expand their scales.In 2010 our country went into a new round of economic cycle,a wave of mergers and acquisitions in China had been set off.At the same time horizontal mergers and acquisitions has gradually become the mainstream of domestic mergers and acquisitions activities.It provides a great opportunity for us to study the relationship between economy cycle,the types of M&A and M&A performance.In this paper,we choose 1336 cases of M&A events occurred in 2010-2015 as the sample to find out with the transformation of M&A purposes,market competition and M&A costs in different economic cycle,how the relations between the type of M&A and M&A performance will change.Through the empirical analysis,this paper draw the conclusion: During the period of economic expansion,pro-cyclical horizontal M&A performance is superior to the pro-cyclical diversified M&A.During the period of economic austerity,the short-term counter-cyclical horizontal M&A performance is better than diversified M&A performance,but in the long run,there were no significant difference between them.The impact of scales of M&A,corporate size and the proportion of the first largest shareholder on M&A performance has no prominent transformation at the different stages of economic cycle.However,the methods of payment,M&A associated attributes and the debt to assets ratios are greatly influenced by the economic cycle.In this paper,based on the point of theory,we enrich the theoretical system of M&A performance study,and find out a new way to explain the contradiction in the existing researches.Based on the point of practice,the research conclusion in this article will provide positive reference for enterprises' M&A strategies selection and government policy-making.