Stock Price Index, CEO Power And M&A Of The Listed Companies

Under the background of economic globalization and integration,the stock market plays an important role in the development of the real economy.The stock market not only bears the important function of financing in the economic operation,but also plays a great role in the process of resource allocation and financial risk management.The existing research shows that the stock market can stimulate the development of the real economy.But if the stock price index changes violently,it is likely that there is excessive speculation in the market,thus affecting the investment decision of the enterprise.As a major investment decision activity,there are few studies on whether M&A will be influenced by stock price index changes and the effect of stock price index changes on M&A in the existing literature.Since the reform and open policy,China's stock market has achieved rapid development and M&A activities are becoming more and more active,so how does the situation of stock price index affect the M&A behavior for our country in the process of transformation? Executives play a major role in the whole process of mergers and acquisitions,such as making M&A decisions,take overing,and post-merger integration,so how does the motivation and behavior of executives affect M&A activities and performance? In addition,the domestic scholars found that China's aggregate merger activities are developing in a wave way,so what is the relationship between aggregate merger activities and monetary policy as one of macroeconomic variables?Different from the previous literature that studied enterprise mergers and acquisitions simply from micro or macro perspective,this paper introduces a macro and micro interaction framework of company mergers to study the influence of stock price index,CEO power and their interaction on M&A decisions of the listed companies as well as the changes of CEO compensation and company performance after M&A.The study finds that stock price index has a positive impact on M&A of the listed companies in China.And the greater CEO power is,the more obvious this positive effect become.Although CEO compensation increases obviously in the firm M&A has been implemented compared with those who have not carry out M&A transactions,the performance has not been improved significantly.It indicates that mergers could be the results of CEO of the listed companies using management power to maximize their own interests in the changing environment of stock market.Futherresearch also finds that as an important mean of government's macro-regulation,monetary policy has a great influence on enterprise M&A behavior and effect.Compared with the relaxed monetary policy period,the impact of stock price index on enterprise M&A weakens in the time of monetary policy tightening.Compared with those corporations which have not carry out M&A,CEO compensation has no significant improvement in the company M&A have been implemented.But the company's performance remains unchanged significantly.The results show that it is of great significance to clarify the relationship between stock price index and behavior and effect of M&A and the adjustment mechanism of CEO power and monetary policy in it in the critical period of the overall transformation and upgrading of China's economy and society and the deepening reform of capital market.