How Does Social Capital Affects Cross-border Mergers And Acquisition Behavior Of Chinese Companies?

With the development of Economic Integration and Global Value Chains,Crossborder Merger and Acquisition has become an important way for internationalization.Nowadays,the international environment is full of changes and uncertainty,more and more scholars have paid attention to the role of Social Capital in the social network.Especially,for Chinese companies,who under the context of "relational society" and marketization,how does Social Capital affect their Cross-border M & A behavior? How does this effect interact with Marketization? Trying to answer the above questions may help companies to use their comparative advantages in internationalization,and also help us to understand the characteristics of Chinese Cross-border M & A.Based on the relevant theories and literature of Social Capital and M & A,this paper analyzes four mechanisms of Social Capital on Cross-border M & A,including managers' overseas background,academic background,political connection,and financial connection.In addition,considering China's national conditions,this study also considered the interaction effect with Financing Constraints and Marketization.This paper used the sample of Chinese A-share listed companies from 2004 to 2017 for the empirical tests,with manually collected Social Capital variables and Cross-border M & A variables for regression.It also used the Propensity Score Matching(PSM)method for robustness test to draw the following conclusions:1.Social capital will significantly promote the Chinese Cross-border M & A activities of enterprises.Specifically,the manager's overseas background and academic background have significantly increased the probability of Cross-border M & A.Their political connection mainly promoted the Cross-border M & A of Stateowned Enterprises.Their financial connection can indirectly promote Cross-border M & A to a certain extent.It can regulate and mitigate the negative impact of Financing Constraints on Cross-border M & A.Therefore,it can play a role when companies face Financing Constraints.In addition,the role and effect of Social Capital are also different in different types of companies.The Cross-border M & A of State-owned Enterprises are greatly affected by the promotion of academic background and political connection.While,non-State-owned Enterprises are mainly affected by overseas background,academic background,and financial connection.2.The role of Social Capital in Cross-border M & A will be affected by the company's Financing Constraints and market environment.When the company faces high Financing Constraint,they will actively use the overseas background and political connection to promote Cross-border M & A.From the macro aspect,the role of Social Capital in Cross-border M&A will be affected by the degree of Marketization.As the degree of Marketization increases,the promotion of academic background and political connections will be marginally replaced,and the role of overseas backgrounds will be amplified.Therefore,companies can actively expand their relationship networks,enhance their managers' overseas and academic background experience,and use Social Capital based on their own heterogeneity as a comparative advantage in Cross-border M & A.From the policy aspect,the government also needs to increase the degree of Marketization and alleviate Financing Constraints,exerts the powerful role of Social Capital,and facilitate Cross-border M & A.In summary,this paper systematically studies the relevance between Social Capital and Cross-border M & A based on the theories,characteristic facts,and empirical tests.It also reveals the influence,function and regulatory mechanism of Social Capital on Cross-border M & A.It provides new ideas and evidence for understanding Crossborder M & A from the view of Social Capital,and exploring the role of Social Capital in the economic behavior of companies,which is a useful supplement to the existing research.