Executives' Activities,Mergers And Acquisitions And Abnormal Returns Of Listed Companies

Mergers and acquisitions(M&A)of listed companies are one of the important means to achieve horizontal integration between peer industries,diversification strategy across industries as well as other business objectives such as asset allocation.The abnormal volatility of stock ‘s short-term returns caused by M&A is also one of the hot topics in the capital market.Existing studies mainly focus on the long-term performance brought to the listed companies by M&A activities which is often measured by annual accounting indicators.However,there might be a lot of noise interference during this period,which results in the performance being affected by other factors.This paper regards the public news reports of listed companies on top executives as the activities of top executives,few studies have examined the abnormal returns in the event window from the perspective of the public news reports of the listed companies' chairman and executives before the M&A event.This thesis examines whether M&A can bring significant positive cumulative abnormal returns to shareholders from the perspective of diversification strategy M&A of listed companies.What factors influence the stock with high cumulative abnormal return? Can the more publicly reported executives of listed companies bring higher cumulative abnormal returns? Can listed companies launch mergers and acquisitions,and find clues through public news reports on executives(or companies)closely related to the news of mergers and acquisitions before the suspension of mergers and acquisitions?This thesis takes more than 500 mergers and acquisitions carried out by Chinese Ashare listed companies between 2012 and 2017 as the research object.Firstly,based on the event study method,the cumulative abnormal return rate of stocks in the estimation window is estimated by the market model and the three-factor model respectively,and the results are statistically tested.The empirical results show that there is a significantly positive cumulative abnormal return(CAR)in the event window of the listed companies with M&A,but there is no significant difference between the companies that adopt crossindustry M&A and those that adopt non-cross-industry M&A.Furthermore,after controlling for the variables related to market environment and corporate fundamentals,this thesis continues to explore the factors affecting CAR in M&A transactions by taking listed companies as the main merging party(the merging party).The empirical results show that :(1)the stronger the growth,the higher the stock CAR of such companies will be after M&A;(2)the larger the asset size involved in the M&A transaction,the higher the CAR;(3)implementing cross-industry M&A transactions can enhance CAR;(4)the more news reports about the chairman in the year before the suspension of merger and acquisition,the lower CAR will be.The contribution of this thesis is as follow: First,based on the existing literature,this thesis innovatively takes the news and executive activities related to the chairman and senior executives of listed companies as variables to investigate the impact on the abnormal return rate.This thesis finds that the more reports on the chairman in the year before the suspension of merger and acquisition events,the lower the cumulative abnormal return.Secondly,this thesis finds that the stock performance of companies with diversified M&A strategy is better than that of other M&A samples in the short term.The stronger growth of listed companies can bring higher cumulative abnormal returns for mergers and acquisitions.These conclusions can bring important reference value to investors.