The Impact Of Absorption Capacity On The Performance Of M&A In Listed Companies

In the past 40 years of reform and opening up,China has actively created and joined a number of inter-state cooperation organizations,and its right to speak internationally is increasing.Investing in overseas markets and expanding business has also become one of the major trends in the development of Chinese enterprises.It is of great significance for Chinese enterprises to go abroad and achieve an internationalized layout.Affected by the industry,scale,and M&A business strategy,the mechanism of overseas M&A on corporate performance is more complicated.This paper focuses on the effect of absorptive capacity on overseas M&A performance,in order to explore the difficulties faced by Chinese companies in overseas M&A.The solutions will help Chinese enterprises to formulate appropriate M&A strategies and business strategies,thereby maximizing the benefits brought by overseas M&A to enterprises and promoting their long-term development.This paper reviews the relevant research conclusions of predecessors,and selects three dimensions of absorptive capacity to analyze,includes R&D investment,M&A experience and strategic planning.In order to show the absorption capacity of the company more intuitively,this paper chooses "UNIS purchased H3C" and "Jufei purchased LiveCom" as typical strategic M&A and non-strategic M&A cases,sorting out the similarities and differences between the two,to analyze the impact of absorptive capacity on the performance of listed companies' overseas M&A.By contrast,in the same external market environment,UNIS's R&D investment and M&A experience are higher,and the short-term performance is better than Jufei.After the completion of overseas M&A,UNIS pays more attention to the integration of target companies,so that UNIS's long-term operating performance and profitability are better than Jufei,demonstrating the importance of integrating absorptive capacity.This paper statistically analyzes the characteristics of overseas M&A events of listed companies during 2014-2017.The statistical results show that the overseas M&A decisions of enterprises are affected by the market environment.In 2015,the stock market was active,and the overseas M&A of enterprises were more,the market response is significantly better than other years;in terms of industry distribution,overseas M&A are concentrated in the manufacturing industry,especially in electronic equipment manufacturing,special equipment manufacturing and pharmaceutical manufacturing,etc.Compared with emerging industries,traditional industries can achieve higher M&A performance;according to M&A purposes,most overseas M&A are committed to horizontal integration,but the market prefers strategic objectives such as business transformation and asset adjustment;finally,overseas M&A effects in different markets are different,GEM's short-term performance is more significant.This paper uses the event research method with STATA13 to analyze the impact of dimensions of absorptive capacity in 478 overseas M&A samples on the performance of listed companies.We select the stock price cumulative abnormal return rate(CAR)represents short-term performance,and select R&D investment,M&A experience and strategic planning to quantitatively analyze the influencing factors of short-term performance of M&A.The empirical results show that the short-term performance is positively related to internal absorption capacity of the M&A market.The ability of enterprises to absorb knowledge increases with the increase of R&D investment,and the learning effect of M&A experience goes decreasing with the increase of the number of experiences;the fundamental characteristics of both parties have a significant impact on the short-term performance of the company,as well.This paper also focuses on the incentive effect of R&D investment on long-term business capability and profitability of the company.The empirical results show that most companies will increase their R&D investment after overseas M&A,and the growth rate of the business income and ROE are positively related to the growth rate of R&D investment.Therefore,companies should appropriately increase their absorptive capacity after overseas M&A to promote long-term performance growth.