Research On The Impact Of Choice Of M&A Payment Method On Short-term Performance Of Chinese Listed Companies On Condition Of Financial Constraints

Mergers and acquisitions not only help companies expand their business in short-term,but also improve the efficiency of social resource utilizations.In the present situation of inhibiting overcapacity and upgrading industrial structure,a fever of M&As has been spread all around the country.In addition,China Securities Regulatory Commission(CSRC)has suspended IPO approval several times.As so many companies are waiting for IPO approval,there is no hope for them to be listed on A share market within foreseeable future.Therefore,many firms seek for alternative solutions in the predicament.By means of M&As,some of them have their stocks listed on Stock Exchange successfully.With strong motivations from both government and market,the capital market in our country has welcomed a new wave of M&As.The innovation of the method of payment of M&As is emerging in endlessly as well.Because whether M&As can bring wealth to shareholders of listed companies is a key criterions to judge whether this wave of M&As is simulating behaviors or true value-increasing economic behaviors.Hence,research on the impact of financial constraints and methods of payment on short-term M&As performance is of great practical significance.Start with definitions of related concepts,this paper reviews relevant research on financial constraints,the choice of method of payment and short-term M&As performance from both domestic and foreign scholars and sets forth related basic theories.Then,three hypotheses on financial constraints,methods of payment and short-term M&As performance are put forward according to theoretical analysis.We use 1146 M&As completed in year 2015 and 2016 as our sample.By means of Logit Model,Event Study and Multilinear Regression Model,the empirical tests of relationships among financial constraints,methods of payment and short-term M&As performance are carried out.Finally,we make analysis of empirical results.According to the empirical research,we find:(1)listed companies with high level of financial constraints are more likely to choose payment methods with stock as part of consideration,say,stock payment or mixed payment.(2)M&As can bring wealth to shareholders of listed companied regardless of methods of payment,but short-term returns in M&As using stock payment or mixed payment are significantly higher than that in M&As using cash payment.(3)Short-term returns in M&As using stock payment or mixed payment are significantly higher than that in M&As using cash payment regardless of level of financial constraints.By the method of cash payment,short-term returns in M&As of listed companies with high level of financial constraints are significantly better than that of non-financial constraints companies.On the contrary,the difference of short-term returns in M&As between financial constraints companies and non-financial constraints companies are insignificant when stock payment or mixed payment are used.