Research On The Impact Of Director Network Of Listed Companies On Long-term Performance Of Acquirers In China

Since the 1980 s,with the development of market economy in China,M&A transactions have occurred frequently,which has become an important means for Chinese companies to achieve resource allocation.The fundamental purpose of mergers and acquisitions is to improve performance and achieve long-term stable growth of profits.Academia has not yet reached a consensus on the proposition of “whether M&A events can bring about performance improvement”,and there are numerous factors affecting M&A performance in the study.China belongs to a typical “relational society”,and “relationship” plays an indispensable role in our economy.According to the current research conclusions of scholars,directors’ linkages will have an impact on a series of business management activities,such as investment,financing,and even the choice of CPA firms.According to Guotai’an CSMAR database,the proportion of listed companies with linkages in China is increasing day by day,which plays an important role in the operation and management of enterprises.At the same time,directors’ linkages will promote the dissemination of information and experience among enterprises,affecting all aspects of enterprises,including acquirers’ performance.Based on the directors’ data and financial data of A-share listed companies in Shanghai and Shenzhen Stock Exchanges from 2009 to 2017,and taking the M&A events in 2010 to 2015 as samples,this paper combines the four theories of resource dependence theory,organizational learning theory,principal-agent theory and busy director theory with China’s national conditions,and analyses the impact of the centrality of directors’ network on the performance of acquirers’ directors.Based on the theoretical mechanism,this paper puts forward the hypothesis of this study and studies the impact of directors’ network on the long-term performance of acquirers of Listed Companies in China.The empirical results show that the more the directors of acquirers are in the central position of the directors’ network of listed companies,the better the performance of the second and third year of acquirers will be,but it has no significant relationship with the performance improvement of the year of acquirers.This finding implies that the network of directors has a positive impact on the performance of acquirers,but the impact lags behind.According to the conclusion,this paper puts forward several suggestions for this purpose: listed companies with M&A needs can make full use of the benefits of director linkages and properly introduce chain directors,improve corporate governance mechanism and formulate comprehensive integration policies before mergers and acquisitions;listed company regulators should improve the information disclosure system,promote market-oriented economic construction,and reduce the cost of information asymmetry;For investors who intend to invest capital in listed companies with M&A needs,directors’ linkages can be used as a reference index to invest capital in companies in which directors’ networks are more centralized.