The Impact Of Mergers And Acquisitions On Corporate Advertising Investment

With the rapid growth of the scale of our country’s M&A transactions,mergers and acquisitions(M&A)have become an important driving factor for the development of our country’s enterprises.M&A can help companies learn advanced technology and management experience,and bring R&D synergy and marketing network synergy.Under the background of innovation-driven strategy,most of the existing domestic literatures focus on the impact of M&A on corporate innovation,and there are relatively few literatures discussing how M&A affect corporate advertising investment,but whether corporate innovation results can ultimately achieve good market benefits requires marketing advertising assistance and support.Today,with the rapid development of the Internet and media platforms,the importance of advertising has become increasingly prominent.Advertising is conducive to enhancing the brand awareness of corporate R&D results,promoting corporate innovation into revenue,and helping companies to stand out in a fiercely competitive market.Therefore,the study of the impact of M&A on corporate advertising investment has certain theoretical and practical significance.In order to explore the impact of M&A on corporate advertising investment,this paper analyzes from both theoretical and empirical perspectives.In the theoretical analysis part,this paper analyzes the changes in advertising investment before and after mergers and the possible effect path of M&A on corporate advertising investment by constructing theoretical models and combing relevant literature,and puts forward corresponding research hypotheses.In the empirical analysis part,this paper uses the 2012-2020 A-share listed companies in Shanghai and Shenzhen as a sample to test the impact of M&A on corporate advertising investment by constructing a progressive double-difference model,and conducts heterogeneity analysis and robustness test.Finally,this paper uses the mediation effect to discuss the influence mechanism of M&A on corporate advertising investment.The study found:First,M&A have significantly increased the advertising investment of companies,and the promotion of M&A on corporate advertising investment is significant within five years after the completion of the merger.Since the integration of resources,organization,technology and other aspects of the M&A parties is a gradual process,the synergy brought by M&A is not short-lived.The impact of M&A on corporate advertising investment should be long-term and continuous.The digestion and absorption of resources and technology tends to disappear when they are complete.Second,there is heterogeneity in the impact of M&A on corporate advertising investment.This paper discusses three aspects:the region where the company is located,the nature of corporate ownership,and enterprise scale.In terms of the region where the company is located,M&A has a significant role in promoting corporate advertising investment in the eastern region and other regions,but it has a stronger role in promoting enterprises in other regions.In terms of the nature of corporate ownership,M&A has a stronger role in promoting the advertising investment of state-owned enterprises than non-state-owned enterprises.In terms of enterprise scale,compared with large-scale enterprises,M&A have a stronger role in promoting advertising investment of small-scale enterprises.Third,the research on the mechanism of action shows that:M&A can promote companies to increase their advertising investment by enhancing market power and strengthening debt constraints.On the one hand,because M&A weaken market competition,the bargaining power of enterprises is enhanced,which tends to increase product prices,thereby increasing the marginal revenue of advertising,and motivating enterprises to increase advertising investment to obtain more consumers.On the other hand,after M&A,the financial burden of enterprises will increase.In order to increase revenue and improve business conditions in the short term,enterprises can increase advertising and marketing activities to increase product sales and increase corporate profits.