A Study On The Performance Of Cross Border Mergers And Acquisitions Under Institutional Theory And Springboard Theory

In 2016,China’s cross-border mergers and acquisitions experienced a feast.The transaction amount and number of deals in the M&A market reached a record high.More and more companies began to force transnational mergers and acquisitions to complete the "leap-forward" development.This article takes 310 Chinese companies listed on the A-share market as the research object,and uses the recent 310 cases of cross-border mergers and acquisitions from 2009 to 2015 as research samples,and further explores these factors to the enterprise from the perspective of institutional theory and springboard theory.We want to explore the impact of long-term performance of cross-border mergers and acquisitions.Regarding the system,the institutional distance commonly used by domestic and foreign scholars is used as an explanatory variable.From the perspective of springboard theory,two major motives are sought for asset seeking and opportunities based on springboard behavior,and the knowledge distance and market opportunities for explanatory variables are refined.In order to clarify the relationship between the two theories and the two distances,knowledge distance was used as an adjustment,and the empirical test of its effect on institutional distance and corporate performance.In addition,the use of the state-owned holding ratio of corporate controllers as a moderating variable introduces the study of various factors.This paper argues that due to the relatively low efficiency of state-controlled enterprises and the hostile role of the host country,it may play a negative regulatory role.The empirical results show that institutional distance has a negative effect on cross-border M&A performance,and knowledge distance has a positive effect on cross-border M&A performance.However,under the condition of relatively large knowledge distance,it can weaken the negative impact of institutional distance,and also confirms the impact on emerging markets.Another explanatory variable market opportunity for the springboard theory has also been verified.The greater the market opportunity of the host country,the higher the level of performance achieved.The proportion of state-controlled shares of actual controllers is positively affecting corporate M&A performance.However,when the actual controller’s state-owned shareholding ratio was used as a regulatory variable,it was found that it had no significant regulatory effect on institutional distance and corporate cross-border mergers and acquisitions,and there was no significant effect on knowledge distance and corporate cross-border M&A perforrmance adjustment.However,the proportion of state-controlled shares of actual controllers weakens the positive effect of market opportunities on cross-border M&A performance.In conclude,in the case of a large distance of knowledge,the negative effect of institutional distance on M&A performance is weakened,indicating that companies do not need to "fear" the institutional distance and "fear to the end" when conducting cross-border mergers and acquisitions.It’s important for companies to understand the host countries,especially the knowledge distance.Companies should know whether this knowledge distance exactly matches the needs of the current business,thus weakening the negative impact of institutional distance.The proportion of state-owned shares of the actual controllers of multinational corporations does not have a regulatory effect on institutional distance and M&A performance.The probable reason is that the state-owned shareholding enterprises enjoy the supportive effect of the home country system,and they are also subject to the boycott effect of the host country system,which reflects the two-sided nature of government support for businesses.Similarly,there is no regulatory effect of the state-owned shareholding ratio of actual controllers of enterprises on knowledge distance and M&A performance,which indicates that the acquisition of knowledge distance mainly lies in the enterprise’s own learning and integration capabilities,which are greatly affected by the enterprise’s own resource conversion capabilities.Therefore,the proportion of state-owned holdings does not significantly affect the positive impact of knowledge distance on firm performance.In the future,it may be possible to explore further from the characteristics of the company itself.The significance of the state-owned controlling shareholder’s state-owned controlling shareholder’s negative adjustment to the host country’s market opportunities and corporate M&A performance has been verified.One possibility is that the higher the state-owned holding ratio,the lower the operating efficiency of the company,even if the host country has a very good market.So,they lost opportunities.Another,may be because the host country realizes that the acquirer belongs to the other government,and thus gives more support to the local enterprises,making it difficult for the acquirer to obtain equality.Because of its unfair competitive position in the market,it is unable for acquirer to grasp the market opportunities of the host country.Finally,for future research directions,the two sides of the government’s role are worthy to be researched,so as to provide different enterprises with more complete analysis and help them obtain satisfactory performance levels.It is also a valuable research topic to explore the mechanism of knowledge distance under the perspective of springboard theory.As a theory for emerging market companies,the scholars have a lot to do with the springboard theory.