Influence Of Political Connections&government Subsidies On Merger&Acquisition Mode

In recent years,with the rapid development of economy,China's pursuit of acquisitions around the world has been a big trend for the global market and it is now standing at a whole new height in the world M&A market.Besides,China's domestic merger and acquisition has also experienced a rapid development.Government involvement plays an important role in Enterprises' M&A mode choice.Often,Government involvement includes government subsidies and political connection.So we pay attention on the relationship of Chinese M&A and Chinese government.This paper centers on the relationship between government subsidies,political connection and the M&A mode separately,mainly talking about how government elements affect companies' M&A mode,whether to carry out cross-border M&A or domestic M&A.Several problems are discussed as follows:(1)Does government subsidies induce companies cross-border M&A?Whether the amount of government subsidies affect the result of the mode of companies' M&A?(2)How does the political connection affect listed companies' M&A mode?(3)Is there any different result for those companies with different M&A aims when it comes to the relationship between government and M&A mode?After further studies,we can conclude as follow.Firstly,the existence of government subsidies may induce companies' cross-border M&A rather than domestic M&A.Secondly,on the whole,the political connection has negative effects on the possibility of companies' choosing cross-border M&A.For those companies with different M&A aims,political connection plays different roles.Finally,we can see for those companies in developed area such as eastern area,it is more likely for them to choose cross-border M&A.