The Influence Of Political Background And Industry Relevance On Long-term Performance Of Chinese Private Enterprises’ Cross-border Mergers And Acquisitions

In the recent years,under the background of the initial establishment of the market economy,the urgent need is adjusting industrial structure,and the transformation of the economic growth,Chinese companies choose to invest abroad,and the amount of investment has been increasing as time goes by.Cross-border Mergers and acquisitions among companies have been the focus of attention in the academic field.At present,the pace of growth varies in different areas.The government has the most of rights to allocate major resources,and the state-owned enterprises that have a natural "blood" relationship with the government,so they can gain a lot of convenience.Private enterprises often have many difficulties such as financing and industry barriers in their growth.To overcome these barriers and difficulties,private enterprises have been trying to use an alternative mechanism to make up for institutional deficiencies and build a “blood” relationship with the government.is becoming an effective way.In the academic field,some scholars pointed out that when companies implement diversified mergers and acquisitions,companies which usually looking for political connections have better business performance than non-political affiliates.This positive effect is most significant for private companies.However,previous scholars did not analyze whether this conclusion is still valid in cross-border mergers and acquisitions.Based on the background analysis above,from the perspective of long-term performance,this paper selects mergers and acquisitions of private companies that choose to make cross-border mergers and acquisitions firstly from 2008 to 2014 as initial samples and processes the original sample data to obtain 102 research samples.The source is the CSMAR and WIND databases.It mainly studies the relationship between political associations and M&A performance of private listed companies in China,and further introduces the types of crossborder M&As to explore in depth the ways in which different M&A types affect the relationship between political associations and M&A performance.Using Excel,Spss17.0 and other software to process the data,conclusions as follows: Political associations have a positive impact on the performance of Chinese private listed companies;the industry correlation has a negative impact on M&A performance,indicating that private enterprises are transnational in mergers and acquisitions,mergers and acquisitions of industry-relevant companies do not effectively bring long-term benefits to the company.The article then divides the sample into corporate samples with political background and no political background to conduct research.It is found that industry relevance weakens political linkages.The positive effect of M&A long-term performance.The innovation of the article is dividing the M&A events according to the relevance of the industry they are in and the political relevance of private enterprises into two parts,and further observe the long-term performance of their cross-border mergers and acquisitions.