Research On The Influence Of Target Capital Structure Deviation On Corporate M&A Decision

After the implementation of the deleveraging policy,the growth rate of transaction scale in the domestic M&A market has shown a trend of slowing down.It can be seen that the implementation of the deleveraging policy has had a certain inhibitory effect on the domestic M&A market.Considering that the deleveraging policy focuses on resolving the debt risks of highly leveraged companies,it is highly targeted,which means that the deleveraging pressure faced by companies usually increases significantly with the increase in debt levels.In order to explore the deleveraging pressure faced by corporate M&A,this paper uses the analysis method of target capital structure in the classic theory of capital structure,and defines that when the actual capital structure exceeds the target capital structure,the enterprise is excessively indebted.Therefore,this paper transforms the macro-problem of the impact of deleveraging policies on the domestic M&A market into the micro-problem of the impact of corporate target capital structure deviation on M&A decisions.Therefore,based on the M&A data of domestic listed companies from 2010 to2018,this paper studies how the deviation of target capital structure affects corporate M&A decisions.The empirical results show that: first,the higher the deviation degree of target capital structure,the lower the possibility and size of M&A,and the stronger the risk aversion tendency in the selection of M&A methods.Second,the mechanism test shows that the deviation of target capital structure will inhibit the M&A behavior of enterprises through financing constraints and capital structure optimization.Third,the heterogeneity analysis shows that the above-mentioned influence mechanism is more significant in the group with higher regional financial development level,lower level of corporate governance and non-state-owned enterprise group.Fourth,by examining the M&A performance of enterprises,it is found that the deviation of target capital structure is significantly positively correlated with the long-term performance of M&A,which indicates that under the constraint of target capital structure,companies acquire fewer but better M&A.Fifth,after the implementation of the deleveraging policy,the inhibitory effect of the deviation of the target capital structure on the M&A behavior of high-leverage companies has been significantly enhanced,which has been verified.Starting from the realistic background of deleveraging,this paper studies how the deviation of target capital structure affects the M&A decision of enterprises.It provides a reference idea for promoting the orderly development of the domestic M&A market,and also provides empirical support for China to continuously promote the financial supply-side structural reform in the 14 th Five-Year Plan period.