Research On The Influence Of Mergers And Acquisitions Premium On Stock Crash Risk From The Perspective Of Industrial Policy

In recent years,China's M&A market has been booming.The Mergers and Acquisitions of listed companies has become an important way for the capital market to serve as a means of adjusting the structure,transferring mode,and improving the quality of substantial economy.However,the level of M&A premiums has also continued to rise.The M&A premiums bubble has been questioned,and the continuous exposure of goodwill impairment has even led to the company turning from profit to loss and stock prices plummeting,laying a huge hidden danger for investors.At the same time,merger and acquisition conforming to industrial policy has always been a key direction encouraged by Chinese government,and it is also a high-risk area for high-premium M&A.However,the rationality and risk of high premium M&A under the encouragement of industrial policy has yet to be examined.Therefore,combining the industrial policy of China to explore the economic consequences of M&A has important theoretical and practical value for the academic and practical circles.Existing literature on the economic consequences of mergers and acquisitions and premiums have focused on financial performance,market reactions,and stock holding returns,and very little research on the cumulative extreme risk of stock return.Based on principal-agent theory,overconfidence theory and government intervention theory,the paper analyzes and examines the impact of M&A premiums on the company's stock price crash risk,and focuses on the moderating effect of the target company's industrial policy on the relationship between M&A premium and the acquiring company's share price crash.Using the relevant data of A-share listed companies from 2007 to 2015,the paper finds that higher M&A premiums will worsen the stock company's share price crash risk and have continuity.Target company's supportive policy has positive moderating effect on the relationship between M&A premium and the acquiring company's share price crash.Further,according to the nature of property rights and the types of M&A,it reveals that the positive moderating effect of industrial policy is particularly significant in private companies,diversified M&A,and especially in the diversification of private companies.At the same time,it also finds that the impact of M&A premiums on the stock price crash risk is also reflected in the diversified M&A of private companies,diversified M&A,especially private companies.Finally,the paper put forward nichetargeting suggestions on government,enterprises and investors.The paper innovatively combines the target company's industrial policy,M&A premiums,and stock price crash risk of the acquiring company,not only enriches the research literature on the economic consequences of M&A premium and the influence factors of share price crash,more importantly,it provides empirical evidence for the micro effect of industrial policy from the perspective of corporate M&A,deepens the understanding of the effects of industrial policy,and has important reference significance for the formulation and implementation of industrial policy,corporate M&A decisions,and premium risk management.