Empirical Study On ESOP And M&A Value Of Listed Companies

In 2011,China Securities Regulatory Commission issued the measures for the administration of major assets reorganization of listed companies,which proposed that when issuing shares to purchase assets,listed companies can raise a part of supporting funds at the same time to improve the market efficiency of M&A of listed companies,broaden the financing channels of M&A,and improve the integration performance of M&A.The enhancement of the looseness of direct financing environment in China has promoted the capital operation of listed companies to seek strategic development by raising M&A capital with issuing additional shares.Listed companies begin to carry out M&A through private directional additional issuance and raise some matching funds to improve the performance of M&A.Under the background of supply structural reform,domestic companies have completed the transformation and upgrading of enterprises through M&A.However,in the process of enterprise transformation and upgrading,there are strategic transformation risks.Whether the goal of enterprise transformation and upgrading can be successfully realized will become one of the investment risk points of market investors.The restart of ESOP in 2014 is providing a new financing channel for the supporting financing of listed companies.ESOP gives employees shares of the company.The rights of shareholders can send a positive signal to the market and investors,improve the trust of investors,so as to improve the integration performance of M&A.Since June 20,2014,the guidance on the pilot implementation of ESOP by listed companies was issued,domestic listed companies have shown great enthusiasm and interest in ESOP.Whether ESOP can bring positive effect to enterprise value,how to design ESOP can bring more benefits to enterprises and employees,and how the implementation of ESOP affects company value have become a hot topic for domestic scholars.44 listed companies have raised supporting funds for M&A through ESOP from 2014 to 2018.The number of Listed Companies implemented ESOP is small at present,because the late implementation of ESOP system.With the implementation of ESOP system in China,the number of companies will increase.In addition,the current ESOP plan is an important financing channel for external investors' trust.Therefore,it is significance to explore the impact of ESOP as a supporting financing object of M&A.Therefore,this paper applies case study and event study methods.First of all,through the case analysis of the typical cases of Saimo Electric and ZhiYun,this paper explores the internal mechanism of the impact of ESOP participating in M&A,and then calculates Buy and Hold Abnormal Return(BHAR)during the event window period from June 20,2014 to September 30,2018,through the method of multiple regression analysis,empirically tests the impact of ESOP participation in M&A of listed companies,and further verifies the conjecture of the case analysis part which is the internal mechanism of ESOP participation in M&A.Through the empirical test,this paper finds that ESOP's participation in supporting financing has a positive impact on the M&A value of listed companies.Through the case analysis and model test of the discount rate of the issuance of intermediary variables,it finds that ESOP's participation in supporting financing has a positive effect on the M&A value of listed companies by transmitting a positive signal to the market and investors and increasing the market and investors' trust in the company,so as to improve the M&A value of listed companies.This adds new empirical evidence and enriches the research content for the research of ESOP and M&A value of listed companies.It also confirms that,ESOP participation as M&A supporting financing can increase the M&A value of listed companies in the process of transformation and upgrading of listed companies enhance the trust of the market and investors.