Research On The Regulatory Effects Of The CSRC'S Feedback On Mergers And Acquisitions

Since the 18 th National Congress,as the State Council has continuously deepened the reform of the control suit,the CSRC has also actively responded to the call,simplified the decentralization of power,simplified the review procedures and successively canceled the approval of major purchases,sales,replacement assets of listed companies and the two tender offer exemptions The approval has greatly accelerated the development of the M&A market.However,the phenomenon of flicker reorganization and false reorganization caused by serious information asymmetry is still common.Under this background,whether the inquiry letter system can play a regulatory role has become an important factor in improving the success rate of mergers and acquisitions.This paper takes the listed companies in the A-shares of Shanghai and Shenzhen Stock Exchange in 2015-2017 as a research sample,and specifically analyzes the regulatory effects of the CSRC's feedback on mergers and acquisitions.In order to achieve the purpose of research,this paper summarizes the literature on M&A performance and the effectiveness of government supervision.Combining the theory of incomplete law and public interest,the event research method is used to calculate the cumulative abnormal return,and then the regression analysis is used to test the impact of subdivided characteristics and problem classification on market reaction and M&A success rate.Firstly,determine whether the feedback is related to the potential risk of M&A by whether it is associated,the number of analysts tracking,or whether the industry is same.Secondly,through the event research method,the cumulative abnormal return of the three working days before and after the event day will be studied on the date of acceptance of the letter,the date of the announcement of the letter,and the announcement date of the letter of the extension.Finally,the feedback's sub-characteristics(the total number of words)is interpreted as the explanatory variable,and the impact on the cumulative abnormal return and the success rate of the acquisition on the announcement date is studied.At the same time,a robust test is conducted on the above regression.In further research,through text analysis,feedback is divided into historical information(financial information,accounting policies,profitability,customer information,industry characteristics and business risks),forward-looking information(profit forecast,performance commitment),transaction information(Transaction plan,trading effect,horizontal competition,asset evaluation,related party transactions),study the impact of specific problem classification on market reaction and M&A success rate then go on group analysis based on the nature of property rights.The results show that: First,in the merger and acquisition reorganization behavior that meets the review conditions,related and cross-border mergers and acquisitions with fewer analysts track are more likely to receive feedback,M&A feedback can effectively identify the potential risks of mergers and acquisitions.Second,the negative market reaction began to occur three days before the announcement of the letter of acceptance.After the announcement,the stock price will slowly pick up;the announcement will generate a positive market reaction on the day of the announcement;the delayed response will have a negative market reaction,but the impact will affect a short period of time.Third,the total number of feedback comments is negatively correlated with the cumulative abnormal returns.Fourth,the total number of feedback comments is ne gatively correlated with the success rate of mergers and acquisitions.Further research finds that the existence of profitability in historical information,performance commitments in forward-looking information,M&A plan and asset valuation in transaction information has the most significant negative impact on the success rate of M&A;The existence of financial information in historical information,profit forecast in the forward-looking information,M&A plan in the transaction information has the most significant negative impact on the accumulated abnormal returns.The nature of property rights affects the effect of supervision,and the feedback from the CSRC is not effective in supervising state-owned enterprises.The significance of this paper is: on the one hand,it fills in the blank of the CSRC's feedback from the Government Regulation of mergers and acquisitions.On the other hand,from the three aspects: characteristics of the company receiving feedback,the market reaction of the announcement of the letter,and the impact on the success rate of the merger,it is of practical significance to study its regulatory effect thus providing evidence support for the establish of a perfect securities regulatory system.The innovations of this article are: first,it enriches the theoretical literature on capital market government supervision,and regards the feedback from the CSRC as the starting point for the first time;second,it provides new ideas for the research on the effects of government regulation;third,it enriches the textual analysis of the regulator y effects of mergers and acquisitions.