The Influence Of Bank Relationships On The M&A Performance Of Enterprises

In recent years,the pace of mergers and acquisitions of Chinese enterprises has been accelerating and the scale of mergers and acquisitions has been expanding.For the needs of integrating resource allocation,expanding enterprise scale and enhancing enterprise value,merger and acquisition plays a crucial role for enterprises.Enterprise financing plays a key role in the whole M&A chain.M&A financing is closely related to the success and performance of M&A.Mergers and acquisitions do not happen overnight,and the integration of resources after the completion of mergers and acquisitions is also very important,which also requires a lot of financial support.In addition,there may be information asymmetry when enterprises choose the objects of merger and acquisition,and the correct choice of the acquired party is also very important for the improvement of enterprise value.Enterprises can establish bank associations(including equity association and executive association.Equity association refers to the cross-shareholding between enterprises and Banks.Executive correlation refers to the fact that the enterprise hires employees with banking background or currently working in the bank to serve as senior executives of the enterprise)to solve the above two problems at the same time,so as to improve the enterprise's M&A performance.Through reviewing relevant literatures,it is known that few scholars have combined bank association with corporate M&A performance from the perspective of bank-enterprise relationship to study the influence of bank association and intensity on corporate M&A performance.Therefore,a total of 609 non-financial a-share listed companies with M&A transactions during the three years from 2013 to 2015 and successful M&A in that year were selected as the overall sample.On the basis of reading a large number of literatures,the measurement of bank related indicators and M&A performance indicators was detennined.and the factor analysis method was used to construct a comprehensive index of M&A performance to verify the impact of' bank correlation and intensity on corporate M&A performance.Through empirical research,it is found that bank correlation can significantly improve the M&A performance of enterprises,and this correlation effect is achieved through equity correlation,and there is no significant relationship between executive correlation and enterprise M&A performance.At the same time,the higher the intensity(including the breadth and depth)of bank association,the more obvious the improvement of corporate M&A performance.To be specific,the closer the equity correlation is,the more it can improve the M&A performance of enterprises.However,the strength of senior executives' association,whether it is the proportion of senior executives' association or the level of senior executives' association,has nothing to do with the improvement of corporate M&A performance.According to the above research conclusions,this paper believes that enterprises can form a good relationship with Banks by establishing a bank association with them when conducting M&A activities.And,equity correlation is the first choice.On the one hand,the establishment of bank association can alleviate the financing difficulties caused by system defects,accelerate the speed of enterprise resource integration,and thus improve the performance of enterprise mergers and acquisitions.On the other hand,when making merger and acquisition decisions,bank association enables enterprises to know the private information of the acquired enterprise through the bank,solve the problem of information asymmetry,reduce the transaction cost of merger and acquisition,and select the object of merger and acquisition reasonably.In the later stage of merger,enterprises can also use the supervision function of Banks to promote the optimization and integration of resources in the later stage of merger and acquisition,so as to improve the performance of merger and acquisition.At the same time,companies also need to consider the strength of bank linkages.The higher the correlation intensity is.the closer the correlation with the bank is established,and the more obvious the advantages of the bank correlation in the M&A investment will be.In short,enterprises should have a more comprehensive understanding of the role played by bank associations in merger and acquisition activities.By establishing bank associations,enterprises can improve their merger and acquisition performance,promote the rational allocation of resources and industrial transformation and upgrading,and adjust the economic structure.