Research On The Motivation And Economic Consequences Of Century Huatong’s Merger And Acquisition Of Shengyue Network From The Perspective Of Social Capital

Due to the accelerating process of globalisation and economic integration,the act of mergers and acquisitions,as a means of integrating resources,is being used by companies seeking external expansion and transformation and is gradually becoming a normal part of corporate development.However,the complexities involved in off-site M&A and the failure of blind M&A are not uncommon in reality,so the introduction of non-economic factors such as social capital is more conducive to a comprehensive analysis of the economic behaviour of M&A,guiding companies to make better use of their own resource advantages and thus improve performance.In a modern market environment,the economic behaviour of modern enterprises is inevitably influenced by informal institutions such as trust,relationships and social networks.However,few scholars have studied off-site M&A behaviour through the lens of social capital.This paper reviews the relevant literature based on corporate M&A theory,social capital theory and synergy theory.In the theoretical section,the paper explains the concepts of corporate M&A,social capital and M&A performance,followed by a study of the relationship between corporate social capital and off-site M&A,focusing on the influence of government social capital,financial social capital and shareholder social capital on corporate motivation for off-site M&A.Finally,the paper analyses the impact of social capital on the economic consequences of off-site M&A,providing a theoretical basis for the case study.This paper takes Century Huatong’s M&A of Shengyue Network as an example and finds that it will face problems such as information asymmetry,financing constraints and government intervention.However,the government social capital,financial social capital and shareholder social capital owned by Century Huatong can solve the above problems by reducing transaction costs,providing policy support,financial security and releasing favourable signals to investors,thus successfully completing the off-site M&A activities.On this basis,Century Huatong’s social capital was found to be beneficial in improving its performance in off-site M&A.It is hoped that the research in this paper will provide some insights into the M&A activities of Chinese companies.