An Empirical Study On The Effect Of M & A On Agriculture-related Listed Companies

Agriculture,as the foundation of the national economy and the basic guarantee of national security,has always been highly valued by the Communist Party of China and all China.As an important subject of China's existing agricultural production and management,agriculturerelated enterprises support and lead the development of the agricultural industry to a certain extent.At the same time,because agriculture-related enterprises are closely related to agriculture,their changes have profoundly affected the development of the entire agricultural system.Studying agriculture-related listed companies has important era significance,practical significance,and guiding significance.As one of the important ways for contemporary enterprises to seek expansion and development,merger and acquisition(M & A)is the fastest,most convenient and efficient way to realize the integrated operation and industrialization of agriculture-related enterprises.Therefore,the study of the impact of mergers and acquisitions(M & A)on agriculture-related listed companies has important practical significance and guiding significance for the future development of these companies.This article hopes to use empirical research methods to try to quantify the impact of M & A on agriculture-related listed companies to make up for the relative vacancy in this field.At the same time,it also hopes give certain suggestions on the M & A options of agriculture-related listed companies and the supervision of government and market on agriculture-related listed companies.This thesis based on a comprehensive collection of national laws,regulations,and policy guidelines,research literature,major economic databases,and professional financial websites tries to more clearly defined the scope of agriculture-related listed companies in China's Ashare market.Then take a total of 146 M & A events completed in the ten years from January 1,2009 to December 31,2018 in 463 agriculture-related listed companies in China's A-share market as a sample.Multivariable regression analyses are based on financial indicators and non-financial indicators based on five years from the year before the completion date of the M & A to the third year after the date on annual base.These analyses are based on accounting research.The Generalized Estimating Equation(GEE)model processed with Longitudinal Data Analysis(LDA)and the Between Estimator(BE)model processed with Panel Data were used to compare and analyze the regression results.This thesis mainly conducts theoretical and empirical research from the impact of M & A on the growth of agriculture-related listed companies,agricultural research and development(R & D)investment,and diversified operations.The following conclusions are drawn.The empirical research results show that vertical M & A have the best contribution to the growth of agriculture-related listed companies,especially the positive contribution to net assets is significant.Horizontal M & A have the best promotion effect on R & D investment,and hybrid M & A significantly affect the degree of diversification of agriculture-related listed companies.The larger the relative scale of M & A,the greater the resource burden on agriculture-related listed companies,which will not help their growth,R & D investment,and diversified operations.High premiums of M & A will cause short-term stock prices to rise,but in the long run,they will have an inhibitory effect on corporate growth,R & D investment,and diversified operations.Compared with off-site M & A,in-situ M & A do not have advantages.Higher debts do not bring about higher scale expansion capabilities.Instead,the proportion of R & D personnel has decreased significantly and the degree of diversification has deepened.The merging of related party mergers outweighs the benefits,and has a greater adverse impact on the short-term and long-term development of agriculture-related listed companies.Cross-year M & A brings worse growth than M & A completed that year.Will be more inclined to reduce investment in R & D,which will have a more obvious inhibitory effect on its diversified operations.M & A is a high-risk and high-return for bidding buyers,especially it will greatly enhance its scale expansion ability.However,it will significantly reduce investment in R & D,and have a higher proportion of R & D personnel,and significantly inhibit its own diversified development.Government subsidies can improve short-term performance and cannot promote long-term growth.Aiming at the above conclusions,this thesis puts forward several specific suggestions from the two aspects of the M & A decision of agriculture-related listed companies and the supervision of government and market on agriculture-related listed companies.Suggestions for M & A decisions of agriculture-related listed companies include: Agriculture-related listed companies should choose target companies in different industries based on the purpose of M & A.Only by controlling the relative scale of M & A to a certain extent can the high risks brought by it be controlled.M & A premiums should not be used as a catalyst for M & A decisions.M & A in the same place is not necessarily the most preferred.Try to avoid related party M & A.Completed M & A events which have been decided as soon as possible.It is more advantageous to be a buyer in M & A,but the tolerance of M & A costs should also be considered as one of the considerations of whether a listed company in agriculture chooses to actively M & A.Suggestions for the supervision of government and market include: The grants of government are supposed to be targeted and strengthened.More use the “green box” policy and less use the “yellow box” policy.Market supervision should be more systematic,comprehensive,efficient,and stricter for the approval of agricultural-related listed companies.Whether it will pass decided on the long-term growth considerations of agricultural-related listed companies to protect them.Government policies are better to encourage,guide and regulate the healthy growth of agriculture-related listed companies.Encourage them to focus on the development of their core areas,and realize that forming core competitiveness is the lasting growth force.Strengthen agricultural research and development investment,focus on the development of the agricultural industry,and avoid blind expansion,especially blind mixed M & A.