Study Of Serial Acquirers' M&A Experience,Behavior And The Distribution Of Performance

Serial acquisition has been an increasingly common phenomenon in China.Many enterprises are expanding largely through acquisition,with some active firms even engaging in several cases in a single year.But it raises the important question of whether frequent acquisition activities are good for acquirers?As the M&A activities become more frequent,will acquirers' performance be better or worse?Will enterprise behaviors,like organizational learning,managerial hubris and so on,have an impact on performance?Opinions are widely divided.This paper is about the research on the performance of serial acquisitions made by Chinese A-share listed companies during 1998 to 2017,where the main focus is how the firms',full distribution of long-term and short-term performance will be with growing experience about M&A.The paper will also study the moderate effect of firms'behaviors in serial acquisition activities,including specialized organizational learning as well as managerial hubris,on the post-acquisition performance.Similarly,the moderators are examined in full distribution.Throughout the paper,the method of econometric analysis and demonstration modeling is quantile regression,with the results of OLS model used as benchmark results.The result shows that there is a overall significant downward trend in post-acquisition performance as the firm does more deals,regardless of the length of time window.But not all serial acquirers raise the same issue.Taking the long-term post-acquisiton performance as standard,only the high quantiles face the issue of serious decline,which means that there is not an extreme downside in high order deals but a worse right tail performance.As for the short-term performance,there is even a better right tail performance in high order deals.The characteristics of enterprise behavior have some moderate effects on the aforementioned results,with managerial hubris making the declining tending to deteriorate and specialized organizational learning being counter-productive.Both are not evenly distributed in the full distribution,leading to restrictive functions on a certain class of listed firms.The article is innovative in the aspect of moving beyond average outcome to the whole distribution of post-acquisiton performance,so that we can achieve a more comprehensive and objective evaluation of serial acquisition activities in China.What's more,the result of this paper can provide credible and valid references for management M&A decisions,investment decisions as well as regulators' policy-making.