Research On The Impact Of Vertical Interlock Executives On The Performance Of Corporate M&As

China is now in the key node of economic restructuring and transforming,the Chinese M&A market has ushered in new opportunities for development: the number of listed companies which choose to launch M&A so that they can consolidate resources quickly and accelerate the realization of capital expansion and strategic transformation are increasing.Shareholders are the decision makers of the implementation of corporate M&A strategies,and executives are the direct executors of corporate M&A strategies,both of which have an important impact on corporate M&A performance.Vertical interlock executive can be one of the ways for shareholders to enhance their control over companies.Also,vertical interlock executive is widely found in China.The existing vertical interlock executives mainly focus on two types of completely different effect: ―supervision‖ and ―tunneling‖.Therefore,when executives hold concurrent positions in both shareholder units and listed companies,they may also have two different effects on M&A performance.On the one hand,the vertical interlock executives can help strengthen the supervision of major shareholders over management,reduce agency costs,and restrain the opportunistic behavior of management,so the performance of corporate M&A is more likely to improve;On the other hand,it is a tool for emptying listed companies to obtain more control rights and private interests.What kind of influence does the vertical interlock executive will have towards the corporate M&A performance and how it influences it? This thesis will discuss these questions.The theoretical bases of this thesis are principal-agent theory,information asymmetry theory,benefits of control theory,and corporate governance theory.Based on these theories,this thesis systematically and deeply studies the impact of vertical interlock executives on corporate M&A performance by combining normative research and empirical research.In the part of empirical research part,this thesis selects the M&A activities of companies that are listed on Shanghai and Shenzhen A shares and discloses the information of executives’ tenure from 2010 to 2020 as the research object,and by constructing an empirical model,it deeply studies the effect of vertical concurrent appointments on listed companies’ M&A performance.Also,it introduced the supervision of management and the level of internal control of the enterprise as proxy variables to test the path that influence it.Here are conclusions of this thesis:(1)The vertical interlock executives will significantly improve the performance of M&As.(2)With the vertical interlock executives alleviates,the agent conflicts between shareholders and managers can be alleviated because they can strengthen the supervision of managers and can promote the level of internal control,therefore improve the M&A performance.(3)Compared with companies with high internal control level,the vertical concurrent executives can promote corporate M&A performance higher in the companies that with worse internal control system.(4)Corporate information environment and high level of internal control,there is a complementary role in the supervision and governance of concurrent management and vertical management,and vertical interlock executives can play a stronger governance role when the enterprise information environment is better.(5)Compared with non-state-owned enterprises,vertical interlock executives can promote the performance of corporate M&As better.(6)Compared with the CEO vertical interlock executives,the board vertical interlock executives have a more obvious effect on the improvement of the M&A performance of enterprises.Therefore,this thesis puts forward three suggestions: enterprises should give full play to the corporate governance advantages of vertical concurrent executives to improve M&A performance;enterprises should improve the quality of internal control and strengthen the supervision of vertical concurrent executives over management;enterprises should create a transparent information environment to improve the efficiency of corporate M&A decision-making.The following are the main innovations of this thesis:(1)This thesis found new evidence that vertical interlock executives affect M&A performance,and further clarified the mechanism by which vertical interlock executives affect M&A performance;(2)This thesis expand the research on the corporate governance effect of vertical concurrent executives from the level of internal control and the level of information environment,the nature of property rights and the types of vertical interlock executives.