A Study On The Effect Of Managerial Ability On M&A Performance

With China entering the stage of high-quality development,internal integration and crossindustry cooperation within various industries will become the norm.As a means of external development for enterprises,mergers and acquisitions have become increasingly important,and are an important means for listed companies in China to achieve industrial restructuring and optimize resource allocation.In merger and acquisition transactions,the management team not only executes enterprise merger and acquisition decisions,but also serves as the actual controlling party for enterprise capital allocation.The management team is responsible for decision-making before the acquisition,negotiation processes,and decision-making after the acquisition,which runs through the entire transaction.Therefore,this article has important practical significance for studying the impact of management team capabilities on enterprise merger and acquisition performance.Currently,there is a large difference in the measurement of managerial ability.This thesis draws on the ideas of Demerjian(2012),combined with China’s reality,incorporates fiscal and monetary policies into the model,uses the DEA-Tobit two-step method to measure managerial ability,and explores its impact on M&A performance.In addition,existing literature mainly explains the impact mechanism of managerial ability on M&A performance from the perspective of information asymmetry between the acquirer and external investors,but ignores the information asymmetry between the two parties of the M&A transaction.Therefore,this paper attempts to study the impact mechanism of managerial ability on M&A performance from the perspective of information asymmetry between the two parties of the M&A transaction.Specifically,first,this paper introduces the relevant theory of the impact of managerial ability on M&A performance,and puts forward corresponding hypotheses.Secondly,it further analyzes the specific impact path of managerial ability on M&A performance,and explores the regulatory effects of intermediary agencies and property rights on the relationship between managerial ability and M&A performance.Finally,robustness checks are conducted to obtain more reliable conclusions.The research shows that:(1)the increase in managerial ability cannot significantly improve short-term M&A performance,but can significantly improve long-term M&A performance;(2)in the mechanism analysis,it is found that managerial ability can improve long-term M&A performance by reducing the degree of information asymmetry between the two parties of the M&A transaction;when the degree of information asymmetry of the acquirer is higher,intermediaries are hired,and the property rights of the enterprise are private,the role of managerial ability in improving long-term M&A performance is more significant;(3)in the heterogeneity analysis,when the acquirer is in the manufacturing industry,and the payment method for M&A is non-cash payment,the impact of managerial ability on longterm M&A performance is greater.Based on the empirical results of the paper and the current situation of China’s capital market,three policy recommendations are proposed:(1)market regulatory authorities should improve and standardize the disclosure system of high-level management information of listed companies;(2)listed companies should reasonably evaluate managerial ability in M&A transactions,and focus on the role of intermediary agencies;(3)stakeholders should fully consider the managerial ability of the acquirer when evaluating the value of M&A events.