An Empirical Study Of The Impact Of Institutional Investors On Corporate M&A Performance

With the rapid development of Chinese economy and the improvement of the financial market,Mergers and acquisitions has gradually taken the place of new investment method and become one of the main ways to boost economic transformation and upgrading,improve the position in the international market and optimize the allocation of enterprise resources.With the increasing number of institutional investors' shareholding,institutional investors play an active role in the capital market: participating in corporate governance,stabilizing the securities market and protecting the interests of small and medium-sized shareholders.Both in China and western countries,institutional investors are the leading force in the capital market.As for mergers and acquisitions,institutional investors have gradually shifted from passive participation to active participation,and have a greater impact on M&A performance.Based on this,this paper attempts to study the impact of institutional investors on the M&A performance of listed companies in China from an empirical view,and further analyzes whether institutional investors employ corporate governance to regulate.The main research work of this paper is as follows:First,analyze the mechanism that institutional investors influence the performance of M&A.Institutional investors play an important role in the three stages: before,during and after the merger.In general,the higher the shareholding ratio of institutional investors,the more they are willing to spend energy and cost to participate in corporate mergers and acquisitions activities,and the impact on the company's M&A performance is also relatively larger.The main ways for institutional investors to influence the performance of M&A include: direct approach: directly propose the M&A opinions to the management of the company,and intervene in the shareholder's meeting to exercise voting rights;Indirect approach: improve the corporate governance structure and efficiency by improving internal mechanisms,and maintain the interests of institutional investors interfere with mergers and acquisitions;and other ways such as private negotiation,shareholder proposals,development paradox,and shareholder litigation.Second,empirically analyze the impact of institutional investors' shareholdings on M&A performance.The listed companies with successful M&A activities in Chinese A-share market during 2012-2014 were selected as research sample.The multiple linear regression model was used to test the impact of institutional investors' shareholdings on M&A performance.The study found that the shareholding ratio of institutional investors has a significant positive impact on the performance of listed companies' mergers and acquisitions.The greater the proportion of institutional investors' shareholdings,the more favorable it is to improve the resource allocation of enterprise mergers and acquisitions,the efficiency of optimization and reorganization,and the performance after the mergers and acquisitions of enterprises.Third,further empirically study the regulatory role of corporate governance environment on the positive relationship between institutional shareholding and M&A performance.This article studies corporate governance environment mainly from three aspects: ownership structure(ownership concentration and equity restriction),board independence(the proportion of independent directors),management incentive(management equity and executive compensation).The study found that:(1)As for the equity structure,in 2013,ownership concentration plays a significant negative regulatory role in the positive relation between institutional investors and M&A performance,but has weak positive adjustments in the remaining two years.While equity restriction play a negative regulatory role in the relationship.(2)In terms of board independence,the proportion of independent directors has no significant impact on the relationship between institutional investors shareholding and M&A performance;(3)As for management incentive,management shareholding has strong negative adjustment effect in 2012,while executive shareholding has positive adjustment effect in 2012 and 2014.