Investor Sentiment And M&A Investment Level Of Listed Companies:the Moderating Role Of Equity Structure

As an important measure to acquire quality resources or advanced technology and realize rapid expansion,M&A has always been an important topic in the capital market.Since the implementation of Chinese non-tradable share reform and the issuance of various opinions on promoting the development of the capital market,listed companies have gradually strengthened their awareness of market value management and made market value management as an important management goal of the company.As an important investment activity to enhance the company's competitiveness and increase the stock price,M&A has become an important measure to maximize the market value of listed companies.In recent years,more and more listed companies have been involved in M&A,and the amount of M&A transactions has become larger,but the effect of M&A is not ideal.Therefore,what irrational factors induce the level of M&A activity of listed companies has attracted the attention of scholars.Reviewing the relevant research results scholars pay more attention to the driving role of internal factors of companies and ignore the influence of external factors,namely capital market.As an important participant in the capital market and an important stakeholder of the listed company,whether investor sentiment will affect the investment in M&A has become an urgent issue for scholars to study,which will enrich the research in the field of M&A.According to the theory of catering channels,the influence of investor sentiment on the investment behavior of listed companies stems from the need of management to safeguard their own interests,and this private behavior is also the embodiment of principal-agent problem.Therefore,M&A investment induced by investor sentiment is likely to cause an imbalance in the allocation of resources of the company,which is not conducive to the company's future development.The losses thus incurred will also be reflected in the stock price and Shared by investors,especially the major shareholders with higher shareholding shares.As an important participant of corporate governance,it is of vital importance to exercise effective supervision on the management to restrain the decision-making of self-interested M&A of the management.In the field of corporate governance,the supervisory function of major shareholders is reflected in the shareholding structure of listed companies.It is of great significance to enrich the contents of corporate governance to analyze the supervisory role of shareholding structure.Based on catering theory and principal-agent theory,the basic content of this article to 2014-2016 M&A of Chinese Shanghai and Shenzhen A-share listed companies as research samples,and the sample is divided into investor pessimism and optimism,to the listed company M&A level to be explained variable,as investor sentiment as the explained variable,build multivariate linear regression model,then we will make the descriptive statistics analysis,correlation analysis and regression analysis to test the level of investor sentiment on the listed company merger and acquisition investment effect.At the same time,the equity concentration degree and equity balance degree that reflect the shareholding situation of major shareholders in the shareholding structure are selected as the adjustment variables,and the adjustment effect model is constructed to investigate how the ownership concentration degree and equity balance degree affect the relationship between investor sentiment and the investment level of M&A.In order to further verify the negative inducing effect of investor sentiment,this paper explores the correlation between investor sentiment and M&A performance through further analysis.The empirical study finds that the investor sentiment is positively correlated with the M&A investment level of listed companies,which indicates that the management will cater to the investor sentiment to conduct M&A investment out of self-interest.The negative equity concentration degree regulates the relationship between investor sentiment and the M&A investment level of listed companies,that is,the improvement of equity concentration degree is conducive to the governance of major shareholders,effectively supervise the M&A activities of the management for the purpose of self-interest,and reduce the M&A expenditure.The degree of equity balance positively regulates the relationship between investor sentiment and the investment level of M&A of listed companies,which indicates that the improvement of the degree of equity balance strengthens the interest competition between major shareholders,weakens the supervision strength of major shareholders and makes it difficult to supervise the decision-making of M&A by the management.In this paper,the research confirm that the investor's optimism(pessimism)sentiment is positively(negatively)related to the M&A level of listed companies,which indicates that the management's self-interested behavior will cater to the investor's sentiment to carry out M&A investment.The degree of ownership concentration weakens the positive influence of investor's optimism sentiment and M&A level,that is,the improvement of the degree of ownership concentration is conducive to the governance of major shareholders,effectively supervise the M&A of the management for self-benefit,and reduce the M&A expenditure.However,equity concentration cannot adjust the negative correlation between investor's pessimistic sentiment and the investment level of M&A.The degree of equity balance strengthens the positive(negative)influence of investor's optimistic(pessimistic)sentiment and the investment level of M&A,which indicates that the improvement of the degree of equity balance strengthens the interest competition between major shareholders,weakens the supervision strength of major shareholders and makes it difficult to supervise the decision-making of M&A by the management.Based on the research results and research value,the following management Suggestions are proposed:(1)Cultivate investors' rational investment philosophy,encourage investors to rationally analyze the company's operation and financial status to determine investment plans and reduce speculative investment.(2)Urge the management of listed companies to implement M&A activities rationally,make m&a decisions rationally according to the company's development plan and financial status,and avoid blindly implementing M&A activities that are not conducive to the company's future development in order to cater to investor sentiment.(3)Improve the corporate governance mechanism and establish a shareholding structure with high concentration and moderate checks and balances,so as to effectively play the supervisory role of major shareholders on the management.(4)Design an effective equity incentive plan,which closely ties the interests of the managers with those of the shareholders and the company by granting medium and long-term incentive plans,such as stock options and restricted stock options,to avoid the self-interested behaviors of the managers.