Research On The Influence Of PE On Cross-border Merger And Acquisition Performance

As the mainstream way of China's foreign direct investment,cross-border mergers and acquisitions(M&A)provide an effective way for Chinese enterprises to better go out and speed up the process of internationalization.Cross-border M&A have subsequently become a hot issue in academic research.The mode of private equity and enterprises jointly carrying out cross-border M&A has also gradually developed.Under this mode,it is of great theoretical and practical significance to explore the impact of private equity on the performance of cross-border M&A.On the basis of the research on the performance of cross-border M&A by existing scholars,this paper discusses the impact of private equity on the merger and acquisition performance of listed companies in China from both theoretical and empirical aspects.The main research contents of this paper are as follows: Firstly,based on the Eclectic Theory of International Production and the Asymmetric information theory,this paper expounds the specific advantages of private equity in cross-border M&A.Then it summarizes various problems that domestic enterprises may encounter when initiating cross-border M&A,and analyzes the mechanism of private equity to help solve the problems in cross-border M&A.Then,according to the Signal Theory,I put forward the hypothesis: PE's participation in cross-border M&A has a positive impact on the shortterm performance of cross-border M&A.According to the Eclectic Theory of International Production,the research hypothesis is put forward: PE's participation in cross-border M&A has a positive impact on the long-term performance of cross-border M&A.In addition,due to the different nature of enterprise ownership,the intensity of private equity's role is different,so I put forward the assumption: private equity has a greater effect on the performance(short-term and long-term)of cross-border M&A of private enterprises than state-owned enterprises.This paper takes the cross-border M&A events initiated by A-share listed companies in China from 2009 to 2018 as samples.The research methods adopted are "Event Study " and "Accounting Index Method".Excess cumulative rate of return(CAR)with window period of [-2,2] is used as the measurement index of short-term performance of crossborder M&A,and changes in EPS that eliminates industry influence is used as the measurement index of long-term performance of cross-border M&A.Firstly,we compare the short-term performance of " groups supported by PE " and " groups not supported by PE ",and it is found that the short-term performance of " groups supported by PE " is better than that of " groups not supported by PE ".Then,taking the measurement indicators of short-term performance and long-term performance as the explanatory variables and whether private equity participates in M&A as the explanatory variables,a multiple regression model is constructed for regression analysis.The empirical results show that:(1)the participation of private equity is significantly positively correlated with the short-term performance and long-term performance of cross-border M&A.(2)the short-term performance of cross-border M&A initiated by private enterprises with the background of private equity is significantly better than that of state-owned enterprises.(3)the long-term performance of cross-border M&A initiated by private enterprises with the background of private equity is not better than that of state-owned enterprises.In the part of extended test analysis,this paper verifies the ways that private equity affects the performance of cross-border M&A from two aspects: the amount of M&A and the ability to integrate after M&A.The results show that private equity can provide financial support for M&A,but cannot improve the long-term performance of M&A by improving the ability to integrate after M&A.In addition,this paper also carries out grouping tests according to the different economic nature of the host country.Finally,based on the conclusion that the participation of private equity investment in cross-border M&A has a positive impact on the performance of mergers and acquisitions,this paper puts forward corresponding suggestions on the development of private equity investment institutions from the two levels of the state and enterprises,summarizes the shortcomings of this paper,and puts forward the future research direction.