Research On The Influence Of Political Connection On Transboundarv Mergers And Acquisitions

In the new period of China’s economic development,the tasks of transforming the mode of development,optimizing the economic structure and transforming the momentum of growth are particularly arduous,prominent and urgent.Transboundary M&A based on industrial convergence is an important feature and development trend of M&A and reorganization in the new era.Compared with traditional M&A activities,transboundary M&A oriented to new technologies,new industries,new formats and new modes mostly involves the application of emerging technologies,emerging economic models and emerging consumption directions.It provides opportunities for synergistic integration among industries,and also provides opportunities for strategic development of enterprises.The transformation and upgrading are of great significance.Under the current conditions of building pro-Qing government-business relationship and vigorously fighting corruption,it is of great theoretical and practical significance to study the influence of political connection on cross-border mergers and acquisitions,to clarify the value of political-business relationship in the transformation and development of enterprises,to stimulate and protect entrepreneurship,to deal with the relationship between government and market,and to play the role of government better.Firstly,the paper defines the concept of transboundary M&A and political linkages,systematically combs the related theories of M&A,political linkages and political-business linkages,and puts forward the theoretical hypothesis that political linkages affect transboundary M&A.On the basis of theoretical analysis,733 transboundary M&A incidents occurred between 2007 and 2014 among listed companies on Shanghai and Shenzhen motherboards were selected,and the financial indicators of sample enterprises in the two years before M&A,the year of M&A and the three years after M&A were collected.The level of political connection was divided into four levels: national level,provincial level,prefecture level,district level and below.The type of political connection is divided into three types: government official type,NPC representative type and CPPCC member type.Using binary Logit discrete choice model and OLS regression model,empirically studied the impact of political connections on the success or failure of transboundary M&A transactions and post-M&A performance.The research shows that political connection has a significant positive impact on the completion of transboundary M&A transactions,the profit performance and development performance of transboundary M&A.Further research finds that political connection has a positive impact on the profit performance of cross-border M&A of non-state-owned enterprises,but has a negative impact on the profit performance of state-owned enterprises.The effect of political connection shows obvious heterogeneity and non-linearity.It is not that the higher the level and type of political connection,the greater its effect.This study provides new empirical evidence for the government’s "hand of support" based on pro-Qing government-business relationship in the context of China.The conclusions of this study have important implications for the improvement of government-business relationship and the development of enterprise transformation in the context of industrial integration.