Research On The Effect Of Industry Correlation On M&A Performance Of SME Board Listed Company

As an important extensional capital operation mode,M&A behavior is playing more and more prominent role in making enterprises bigger and stronger,optimizing the distribution of resources and so on.As a major factor in M&A decision-making process,the industry correlation has crucial effect on M&A performance.And whether the performance of M&A can be improved has been the focus of the theoretical and practical circles.Therefore,this paper thoroughly studies the relationship between the industry correlation and the performance of M&A,and provides recommendations to SME board listed companies,the related intermediaries and regulators.This paper firstly explains the definition of industry correlation and M&A performance,and studies the relationship between industry correlation and M&A performance from the aspects of reduction of information asymmetry and synergy effects in operating and management.Then,this paper combs the rapid development trend of SME board listed company in recent years,and different M&A situations from the main-board market and the second-board market.In the choice of the acquisition targets,SME board listed companies are more inclined to choose the industry-related enterprises.The same or similar business model brings a lower risk of integration,quickly enhances market concentration,consolidates the competitive advantages of enterprises and improves the performance of enterprises.In the empirical research part,this paper takes the 148 M&A events completed by SME board listed companies from 2011 to 2013 as the research samples,and then combs the financial indicators by hand.The factor analysis method is used to construct the comprehensive performance evaluation equation,and then it calculates the performance scores of each sample before and after M&A.Further,using the industry correlation as independent variable,this paper examines whether its impact on the performance of the first phase and the second phase of the acquisition is significant or not.The research found:the effect of industry correlation on M&A performance of SME board listed company is lagging behind.In the first year after M&A is completed,there is no significant difference in the impact of different industry-related correlations on M&A performance of the merging companies.While in the second year after the completion of M&A,the M&A in related industries can better improve M&A performance than in unrelated industries.In the long-term,different industry-related correlations have a significant impact on M&A performance of SME board listed companies.M&A in related industries makes the merging company have more knowledge in the operating and management of acquisition targets so that it solves the problem of information asymmetry and helps to produce synergetic effects.However,the synergetic effects take time to bring into play so that it's not well reflected in the short-term.And in the long-term,merging companies can improve operating efficiency,expand market share and achieve higher performance through the integration of the target company's resources,management and experience.