The Analysis Of The Impact Government Intervention On Merger And Acquisition Performance Of Local State-Owned Listed Companies

As far as the current situation is concerned,government intervention is widespread in the economic development process of countries all over the world.This behavior is widespread in almost every country.At the same time,this is also a hot topic in corporate financial research in recent years.In order to effectively alleviate a series of structural problems such as overcapacity due to large-scale investment and insufficient competitiveness of enterprises,Premier Li Keqiang paid attention to China's "structural reform" three times in the Davos Forum in 2015.and mergers and acquisitions is a very important way in structural reform.mergers and acquisitions can achieve the goal of survival of the fittest,so that the industry can continue to develop healthily.In a way,this indicates that a new wave of mergers and acquisitions will occur in China during the current and a long period of economic transition.Most of the mergers and acquisitions are state-owned enterprises,which will play an important role in the national structural reform strategy;therefore,the impact of government intervention on the performance of local state-owned enterprises' mergers and acquisitions is very meaningful.Government intervention emerged as a result of government intervention in macro and microeconomics,including support and plundering of two relative economic effects.The “supporting hand” assumes that the government can provide some benefits to enterprises,such as preferential taxation and more convenient financing.The main purpose is to solve the problem of market failure and support the development of enterprises;“The hand of plundering” assumes that the government,through its control,influences the enterprise and then realizes its social and economicgoals.Obviously,the two theories are contradictory,but the academic community is more interested in the government's research on the “plundering hand” of enterprises.In fact,the “hands of support” and the “hand of plunder” exist simultaneously in the government among the interventions of the enterprise.Different from other countries,China's political and economic environment is quite special.The government's intervention in the economy is very common and severe.The relationship between listed companies and the government is very complicated and diverse.On the basis of reviewing the research status and latest development of government intervention at home and abroad,and based on China's unique institutional environment,this paper combines government intervention with M&A performance of local state-owned listed companies,and provides direct empirical support for the impact of government intervention on M&A performance through M&A events.Government intervention is widespread in China.It is used as a starting point to study the impact of government intervention on the performance of local state-owned listed companies' M&A,so as to empirically test whether local government intervention is the main reason for the particularity of M&A performance of local state-owned listed companies.This paper takes the event of the acquisition of a non-listed company by a listed company that was first announced during the period from January 1,2011 to December 31,2017 as an initial sample,and finds the link between government intervention and M&A performance of local state-owned listed companies.Through empirical research,this paper finds that the performance of local state-owned listed companies with good performance before mergers and acquisitions is negatively correlated with local government intervention;There is no significant correlation between M&A performance of non-local state-owned listed companies and local government intervention;M&A performance of local state-owned listed companies with poor performance before mergers and acquisitions is positively related to local government intervention.Through empirical analysis and conclusions,in order to improve the company's operating efficiency and protect the interests of the company's shareholders,this paper also proposes the following policy recommendations for the relationship between the government and the market : Accelerate the transformation of government functions,so that the degree of marketization of state-owned enterprises' mergers and acquisitions will increase rapidly.Make up for the shortcomings of the state-owned enterprise employment system and reduce the "administration" in mergers and acquisitions.Optimize the internal governance structure of state-owned enterprises and eliminate insider control in M&A activities.Make the government officials' performance appraisal system more scientific.Look for mergers and acquisitions through reasonable industrial policies and structural adjustment systems.Improve mergers and acquisitions laws and regulations to provide a fair environment for the M&A market.I hope that this paper can help to effectively define the boundary between government and market in China's corporate M&A market,regulate government government behavior,and enhance market vitality.