Research On The Impact Of Internal Control Effectiveness To Mergers And Acquisitions Performance

With the rapid development of science and technology,and the deepening of global economic and financial integration,M&A has become one of the important ways for enterprises to develop and grow.M&A help companies improve their competitiveness,but not all M&A can achieve the desired targets.This is mainly because there are all kinds of risks hidden in the process of M&A,which can lead to the failure at any time.As an important mechanism to supervise and manage internal and external business activities,internal control can prevent all kinds of risk factors in production and operation of enterprises to a certain extent,so that it can help enterprises to realize better performance of M&A.Therefore,it has obvious theoretical and practical significance to study the relationship between the internal control effectiveness and M&A performance of enterprises.Based on a comprehensive review of domestic and foreign related studies,this essay mainly focuses on the topic of the impact on internal control effectiveness to M&A performance from nature of proper rights.In current researches,there are relatively less researches talking about the impact on internal control effectiveness to M&A performance,and the existing researches only remain on whether there is a positive correlation between the internal control effectiveness and M&A performance,but there is no further discussions and analysis.The essay focuses on the topic of the impact on internal control effectiveness to M&A performance,based on others' researches,not only it analyzes the "static" situation,but it also analyzes the trend of influence.In conclusion,it expands the thinking and angle of related research.The essay selects 127 listed companies of China main board during 2012 and 2013,which declare the company has finished M&A.About factor analysis is used to measure the explained variables,respectively from profitability(return on assets,return on net assets,earnings per share),debt paying ability(current ratio,liquidity ratio),growth capacity(total asset growth rate,increase rate of business revenue,rete of capital accumulation),capital operation ability(total assets turnover ratio,current assets turnover rate),which are selected to build a comprehensive evaluation system.The effective measure of internal control of explanatory variables is to choose Deb ·China listed company's internal control index directly.Meanwhile,it selects property right nature,M & A scale,target type,related transaction,payment method,growth,financial leverage,cash flow,listed years and industries as control variables,and it does property rights and industry regress respectively.The empirical results show that the more effective of internal control is,the higher M&A performance the companies have,including the short-term,medium-term and long-term performances.It's shown that effective internal control can effectively guard against the potential risks in M&A,thus the effective internal control can improve M&A performance and ensure the realization of M&A targets.Secondly,the results show that the effect of effective internal control on M&A performance appears decline in the long run.It illustrates that the construction of internal control is a long-term project,and it need enterprises' constant effort to make internal control continue to play a risk prevention role.Besides,the results show that the impact of internal control effectiveness on M&A performance in state-owned enterprises is more significant than that in non-state-owned enterprises.From the classification of industry,the theory that the effectiveness on M&A performance in manufacturing enterprises is more significant needs further explore.Finally,according to the theoretical analysis and empirical test results,this article intends to put forward the suggestion from two aspects of enterprise external supervision and internal management,hoping to have reference meaning for the enterprise to improve the merger performance.