Research On The Impact Of PE On The Performance Of Transnational M&As In China

In 2017,there were nearly 3.7 trillion dollars of cross-border M&A transactions in the global scale.The economic globalization and integration actively encourage Chinese firms to engage in international division of labour and cooperation and accelerate their paces of outward foreign investments.As a result,the cross-border mergers and acquisitions in China have been rapidly developing.It has been reported that,in 2016,the amount of cross-border M&A transactions in China amounted to 523.021 billion yuan,increasing by 170%compared with the same period of last year.In this context,this thesis bases on the existing research of cross-border M&A performance,introduces PE as a variable and tries to explore the impact of the participation of PE on the performance of Chinese cross-border mergers and acquisitions from theoretical and practical aspects.The contents of this thesis are as following:Firstly,this paper expounds the specific advantages of PE involved in cross-border M&As based on The Eclectic Theory of International Production and Asymmetric information theory.Therefore,it explains the short-term and long-term impact mechanism of PE on the cross-border M&As performance.Furthermore we put forward the research hypothesis that the PE involved in cross-border M&As performance plays a positive role.Secondly,this paper represents the present status of PE in transnational M&As.Thirdly,by using cases of cross-border M&As in China from 2008 to 2017,we employ the methods of 'event study' and 'accounting method' in this dissertation and take CAR and comprehensive score F as inspection standards to value the performance of index in both short term and long term.As a result,we found the performance of 'PE group' are better than the 'no PE group' both in short term and long term.And based on Short-term and long-term performance models,we establish multiple regression equation by choosing CAR and F as the dependent variables,PE as the explanatory variable,and Asset,Distcap,EDBI as control variables.Empirical results show that:(a)both CAR and F have a significant positive correlation with PE;(b)Smaller companies perform better in short-term mergers than larger ones and small scale private enterprises perform better in long-term mergers than large state-owned enterprises.Finally,we suggest China should take active action to introduce and develop PE according to the conclusion above.And this article is quite innovative in both content and method.