This article focuses on financial management issues in mergers and acquisitions(M&A).It provides an indepth analysis of the financial risks and management challenges faced by contemporary businesses during various...This article focuses on financial management issues in mergers and acquisitions(M&A).It provides an indepth analysis of the financial risks and management challenges faced by contemporary businesses during various stages of M&A,such as pre-merger valuation pricing difficulties,unreasonable financing structures,risks in payment method selection,obstacles to financial integration,and lack of risk management.Targeted management strategies are proposed to address these issues.This paper suggests strengthening due diligence and valuation management,optimizing financing structures,rationally selecting payment methods,deepening financial integration,and improving tax planning.These strategies aim to enhance the level of financial management in M&A,promote economic synergies and management effects,help companies quickly achieve M&A goals,and drive sustainable business development.展开更多
Objective To explore the impact of mergers and acquisitions(M&A)on the innovation performance of the companies from both a patent perspective and a financial perspective by taking the case of M&A Company J as ...Objective To explore the impact of mergers and acquisitions(M&A)on the innovation performance of the companies from both a patent perspective and a financial perspective by taking the case of M&A Company J as an example.Methods The literature research method,patent data analysis method,and financial data analysis method were used.Results:The M&A has a positive impact on the innovation performance of Company J,and the results from the patent perspective and the financial perspective are consistent.Results and Conclusion The literature research method,patent data analysis method,and financial data analysis method were used.The M&A has a positive impact on the innovation performance of Company J,and the results from the patent perspective and the financial perspective are consistent.展开更多
Central Asia is emerging as an important pole of global economic and political power,thanks to its unique location at the heart of Eurasia and its abundance in energy reserves.This study explores the social power chan...Central Asia is emerging as an important pole of global economic and political power,thanks to its unique location at the heart of Eurasia and its abundance in energy reserves.This study explores the social power change in Central Asia from the perspective of cross-border mergers and acquisitions(M&A)by using the social network method.The main results are as follows:(1)The complexity of the energy M&A network has significantly decreased after the financial crisis in 2008.In the meantime,energy M&A became an important way to enhance energy power for buyer countries.Betweenness centrality is becoming the most significant factor affecting energy power,yet the effect of out-degree is weakening.(2)The community underwent multifaceted restructuring,which reflected the shift of energy power in Central Asia.Kazakhstan is the most powerful country in the energy sector in Central Asia.In addition,East Asian countries/regions,represented by China,are actively enhancing their energy power.(3)Different M&A modes reflect various M&A motivations of countries in the energy sector.In the future,more efforts should be made to promote the establishment of a pragmatic and efficient multilateral energy cooperation mechanism and strength the cooperation of the economy and energy finance when China participates in the energy market in Central Asia.展开更多
The obviously ever increasing number of corporate acquisitions in recent decades has improved the general knowledge and awareness of due diligence for both the industry and research. In the current challenging busines...The obviously ever increasing number of corporate acquisitions in recent decades has improved the general knowledge and awareness of due diligence for both the industry and research. In the current challenging business environment, acquisitions face a higher degree of risk profiles, especially cross-border acquisitions in the emerging markets. Conducting a thorough due diligence investigation in the context of an acquisition is more important now than ever. In a broad analysis, this paper researches the key risk factors in the acquisition process and their assessment within a due diligence audit in the acquisition phase. The task of this paper is to match the academic and practical view in order to give a more complete understanding of risk factors to be covered in due diligence audit. The starting point is the research of academic findings which basically concentrate on common approaches considering financial, legal, commercial, and some other issues in domestic acquisitions and in developed countries. In contrast, this paper considers risk factors in cross-border and emerging markets transactions. In addition, a number of business consultants publish studies based on surveys on this topic which reflect typical risk factors based on experience of their customers being involved in cross-border acquisitions. Their risk assessment consists of specific regulatory, political, and other factors, which may lead to commercial and reputational impediments in cross-border acquisitions. The outcome of the comparison is a comprehended list of evaluated risk factors, whereby the academic findings are complemented and supported by the practical experience in the business consultant＇s studies. Moreover, the practical approach points to the fact that due diligence scope needs to be suited to the dynamics of the markets. The comparison and the comprehended list of evaluated risk factors call for a more integrated system of due diligence and show herein the research deficit. Hence, the novelty is the compendium of evaluated risk factors which should be assessed in the pre-acquisition phase. The originality of the paper is given by a unique analysis of academic work about acquisition due diligence literature and consultant studies from anonymized practical experience based on insider information.展开更多
The efficient market theory is a central point in finance. If the capital market is competitive, the investors cannot expect superior gains from their investment strategies with respect to the risk profile. Event stud...The efficient market theory is a central point in finance. If the capital market is competitive, the investors cannot expect superior gains from their investment strategies with respect to the risk profile. Event studies are an approach to verify the impact of the information on the stock prices. In an efficient market, stock prices should fully, promptly, and quickly capture all the information. Instead, the market shows phenomena of an under-reaction and over-reaction for both the short and the long run. The mergers and acquisitions （M＆As） are examples of anomalies. Often, the bidder companies record the negative abnormal returns for both the short and the long run. In contrast to the efficient market theory, the empirical evidence shows that this phenomenon is widespread in all （or most of） the countries of the world. This work examines the long-run performance in M＆As. For this purpose, 40 bidders were observed in Italy during the period of 1994-2008 among listed companies. The buy and hold abnormal returns （BHARs） methodology was used, with which it was possible to observe the returns for three years following the deal.展开更多
This paper constructs a model on the factors that influence knowledge transfer in mergers and acquisitions(M&A) and validates it via questionnaire surveys. Using 125valid collected questionnaires, multiple linear ...This paper constructs a model on the factors that influence knowledge transfer in mergers and acquisitions(M&A) and validates it via questionnaire surveys. Using 125valid collected questionnaires, multiple linear regression analysis and hierarchical regression analysis showed that five out of the ten factors had a positive effect on knowledge transfer effect. The ranking of factor importance, from high to low, was knowledge explicitness, relationship quality, learning intent, advanced transfer activities, and learning capability, which is fairly consistent with positive factors observed in other interorganizational knowledge transfer researches. Our results also showed that one of the control variables(size of acquired firm) had neither a direct or indirect effect on knowledge transfer in M&A. Additionally, our research found that knowledge distance and degree of M&A integration had a positive influence on knowledge transfer effect at the early stage after M&A, but had a negative influence at the late stage. Based on this research, several suggestions for knowledge transfer in M&A are proposed.展开更多
Over the past 10 years, China＇s steel industry has made a substantial development in terms of scale, and has finally become a steel giant in the world. In the upcoming 10 years, fundamental changes will be made with ...Over the past 10 years, China＇s steel industry has made a substantial development in terms of scale, and has finally become a steel giant in the world. In the upcoming 10 years, fundamental changes will be made with the economic growth in China. Against this background, China＇ s steel industry will shift from a rapid development to a slow but sound development. In order to fulfill the second leap of China＇s steel industry, based on its current developing status and characteristics, and from the perspective of both national and corporate development, mergers and acquisition are both effective ways to raise the quality of the existing stock of asset in the steel industry, while technological innovation is the solid foundation for its second leap.展开更多
By a linear Cournot model, the factors associated with the integration of two firms are discussed in terms of their effects on the private surplus and the social welfare in economies with varying extent of openness. M...By a linear Cournot model, the factors associated with the integration of two firms are discussed in terms of their effects on the private surplus and the social welfare in economies with varying extent of openness. Meanwhile, the trade policy of the host government is taken into account. It is concluded that the more open the economy and the more intense the competition, the less profitable the integration; the most important determinant to the changes of the domestic social welfare is the industry strength of the host country. The host authority can enhance the domestic social welfare in two ways： to adjust the trade policy and to only approve the socially desirable cross-border mergers and acquisitions.展开更多
This article presents and analyses the theories with respect to mergers and acquisitions, and list why companies or firms need to be reorganised. Different types of mergers occur under different situations. Mergers be...This article presents and analyses the theories with respect to mergers and acquisitions, and list why companies or firms need to be reorganised. Different types of mergers occur under different situations. Mergers between companies which have same products or services called horizontal mergers; mergers between companies which have buyer-seller relationship called vertical mergers; and companies which have different business fields always use conglomerate mergers. The main motive of companies or firms choosing merger or acquisition is synergy.展开更多
This article sheds light on how synergies arise through mergers and acquisitions (M&A). Enterprises go through the process of Mergers and Acquisitions (M&A) with the goal of improving performance, increasing e...This article sheds light on how synergies arise through mergers and acquisitions (M&A). Enterprises go through the process of Mergers and Acquisitions (M&A) with the goal of improving performance, increasing efficiency and obtaining business synergy. Prior literature suggests that synergies could arise due to taxes, market power or efficiency improvements. This study evaluates the efficiency of M&A in Brazil among publicly-traded companies. We used models with multiple objectives from Goal Programming and Data Envelopment Analysis (GPDEA), employing accounting indicators as input and output variables, and thus evaluated the emergence of synergy gains. These models allow us to analyze and classify the M&A according to the efficiency obtained in such processes. Some of the M&A cases analyzed were mistakenly considered efficient when used traditional models. And, as expected, the GPDEA was proved to be superior to classical models;however it was noticed that few of the cases investigated were proved to be effective. We presented a new application for multi-objective approach that can be used to assess mergers and acquisitions. The dualapplication of GPDEA provided a greater understanding of efficiency generation in synergy creation by means of M&A.展开更多
Mergers and acquisitions become the major force in the changing environment. The policy of liberalization, decontrol and globalization of the economy has exposed the corporate sector to domestic and global competition...Mergers and acquisitions become the major force in the changing environment. The policy of liberalization, decontrol and globalization of the economy has exposed the corporate sector to domestic and global competition. It is true that there is little scope for companies to learn from their past experience. Therefore, to determine the success of a merger, it is to be ascertained if there is financial gain from mergers. It is very important to study the liquidity performance of those companies to test whether those companies have sufficient liquid assets to meet its current obligations. The present study is limited to a sample of companies which underwent merger in the same industry during the period of 2002-2005 listed in one of the Indian stock exchange namely Bombay Stock Exchange. It is proposed to compare the liquidity performance of the thirteen sample acquirer and target companies before and after the period of mergers by using ratio analysis and t-test during the study period of three years. The study found that the shareholders of the acquirer companies increased their liquidity performance after the merger event.展开更多
In recent years,the frequent adjustment of the government’s economic policies and the uncertainty of foreign economic situations have made the degree of uncertainty of China’s economic policies rise continuously.The...In recent years,the frequent adjustment of the government’s economic policies and the uncertainty of foreign economic situations have made the degree of uncertainty of China’s economic policies rise continuously.The increasing degree of policy uncertainty will inevitably affect the investment and financing decisions of micro enterprises.Then,how does economic policy uncertainty(EPU)affect mergers and acquisitions(M&A)behavior?What’s the mechanism?Based on the above questions,this paper uses the data of non-financial listed companies in the Shanghai and Shenzhen stock exchanges from 2008 to 2018 as a sample to explore the relationship between EPU and M&A.The study shows that rising EPU will promote corporate M&A behavior,and this effect is more significant in slow-growth companies.The relationship between EPU and M&A is affected by corporate governance,stock price volatility and financing constraints.Specifically,the company’s M&A size is more sensitive to EPU with higher level of corporate governance,higher level of stock price volatility,and lesser financing constraints.Further research shows that the rise of EPU will significantly promote the improvement of M&A performance in the short-term,but this effect does not exist in the long-term.Various robustness checks do not change the empirical results of this paper.展开更多
By reviewing the research on the effect of corporate merger, we find that knowledge is still limited to the effect of corporate merger on industrial structure. In this article, firstly we study the effect of horizonta...By reviewing the research on the effect of corporate merger, we find that knowledge is still limited to the effect of corporate merger on industrial structure. In this article, firstly we study the effect of horizontal merger on market structure, then explore the effect of market performance on industrial structure. Finally we present a new model that can explain how horizontal merger improves the adjustment of industrial structure.展开更多
The performance commitment mechanism is widely used in capital operations in China’s A-share market.As of January 2025,88 percent of the companies listed on China’s A-share market have participated in some kind of p...The performance commitment mechanism is widely used in capital operations in China’s A-share market.As of January 2025,88 percent of the companies listed on China’s A-share market have participated in some kind of performance commitment arrangement.1Theperformance commitment mechanism,developed and deeply rooted in Chinese markets and systems,has several distinctive features.It plays a positive role in solving the problem of information asymmetry,strengthening the market credit mechanism,and avoiding tunneling.However,it also leads to some corporate governance issues.It is not uncommon to observe‘goodwill impairment’2and‘business performance plunge’3after the target company‘meets the preset targets precisely’4during the commitment period.展开更多
This paper investigates how accounting standards(AS) convergence influences Chinese firms’ overseas mergers and acquisitions(M&As) and shows that this convergence significantly promotes Chinese firms’ overseas M...This paper investigates how accounting standards(AS) convergence influences Chinese firms’ overseas mergers and acquisitions(M&As) and shows that this convergence significantly promotes Chinese firms’ overseas M&As.Specifically, we find that both the probability of success and the value of transactions increases significantly in countries that implemented International Financial Reporting Standards(IFRS) prior to 2007.These results suggest that accounting standards(AS) convergence can improve the comparability of accounting information between China and other countries that have adopted IFRS.Moreover, we find that the impact of accounting standards(AS) convergence on state-owned enterprise(SOE) acquirers is weak.These findings demonstrate that accounting standards(AS) convergence can facilitate Chinese firms’ overseas M&As by improving the comparability of accounting information between China and target countries.展开更多
This paper studies short sellers' trading strategies and their effects on the financial market by examining their accusations of fraud against Chinese reverse merger firms(CRMs) in the US. We find that short selle...This paper studies short sellers' trading strategies and their effects on the financial market by examining their accusations of fraud against Chinese reverse merger firms(CRMs) in the US. We find that short sellers rely on firms' fundamental information, especially relative financial indicators, to locate their "prey." Specifically, they compare a target firm's financial indicators(e.g., growth and receivables) with both the industry average and the firm's history. We find no evidence that short sellers accuse CRMs simply because of their reverse merger label. Additionally, we test the accuracy of short sellers' accusations in the long run and find that accused firms are more likely to delist and less likely to recover from price plunges. Our results also indicate that CRMs' high exposure to short sellers' accusations stem from adverse selection problems: firms with high litigation risk are more likely to choose reverse mergers to access the US capital market. Overall, our results support the view that short sellers are sophisticated investors and shed some light on their decision processes.展开更多
China aims to maintain sound development of the national economy through M&As Anew round of corporate mergers and acquisitions (M&As) is on the way. On September 6, the State Council announced that it would re...China aims to maintain sound development of the national economy through M&As Anew round of corporate mergers and acquisitions (M&As) is on the way. On September 6, the State Council announced that it would require companies in the automobile, iron and steel, cement, machinery manufacturing, electro- lytic aluminum and rare earth industries to accelerate M&As.展开更多
文摘This article focuses on financial management issues in mergers and acquisitions(M&A).It provides an indepth analysis of the financial risks and management challenges faced by contemporary businesses during various stages of M&A,such as pre-merger valuation pricing difficulties,unreasonable financing structures,risks in payment method selection,obstacles to financial integration,and lack of risk management.Targeted management strategies are proposed to address these issues.This paper suggests strengthening due diligence and valuation management,optimizing financing structures,rationally selecting payment methods,deepening financial integration,and improving tax planning.These strategies aim to enhance the level of financial management in M&A,promote economic synergies and management effects,help companies quickly achieve M&A goals,and drive sustainable business development.
文摘Objective To explore the impact of mergers and acquisitions(M&A)on the innovation performance of the companies from both a patent perspective and a financial perspective by taking the case of M&A Company J as an example.Methods The literature research method,patent data analysis method,and financial data analysis method were used.Results:The M&A has a positive impact on the innovation performance of Company J,and the results from the patent perspective and the financial perspective are consistent.Results and Conclusion The literature research method,patent data analysis method,and financial data analysis method were used.The M&A has a positive impact on the innovation performance of Company J,and the results from the patent perspective and the financial perspective are consistent.
基金The Strategic Priority Research of the CAS,No.XDA20040400National Natural Science Foundation of China,No.41871118,No.42022007China Scholarship Council,No.201904910633。
文摘Central Asia is emerging as an important pole of global economic and political power,thanks to its unique location at the heart of Eurasia and its abundance in energy reserves.This study explores the social power change in Central Asia from the perspective of cross-border mergers and acquisitions(M&A)by using the social network method.The main results are as follows:(1)The complexity of the energy M&A network has significantly decreased after the financial crisis in 2008.In the meantime,energy M&A became an important way to enhance energy power for buyer countries.Betweenness centrality is becoming the most significant factor affecting energy power,yet the effect of out-degree is weakening.(2)The community underwent multifaceted restructuring,which reflected the shift of energy power in Central Asia.Kazakhstan is the most powerful country in the energy sector in Central Asia.In addition,East Asian countries/regions,represented by China,are actively enhancing their energy power.(3)Different M&A modes reflect various M&A motivations of countries in the energy sector.In the future,more efforts should be made to promote the establishment of a pragmatic and efficient multilateral energy cooperation mechanism and strength the cooperation of the economy and energy finance when China participates in the energy market in Central Asia.
文摘The obviously ever increasing number of corporate acquisitions in recent decades has improved the general knowledge and awareness of due diligence for both the industry and research. In the current challenging business environment, acquisitions face a higher degree of risk profiles, especially cross-border acquisitions in the emerging markets. Conducting a thorough due diligence investigation in the context of an acquisition is more important now than ever. In a broad analysis, this paper researches the key risk factors in the acquisition process and their assessment within a due diligence audit in the acquisition phase. The task of this paper is to match the academic and practical view in order to give a more complete understanding of risk factors to be covered in due diligence audit. The starting point is the research of academic findings which basically concentrate on common approaches considering financial, legal, commercial, and some other issues in domestic acquisitions and in developed countries. In contrast, this paper considers risk factors in cross-border and emerging markets transactions. In addition, a number of business consultants publish studies based on surveys on this topic which reflect typical risk factors based on experience of their customers being involved in cross-border acquisitions. Their risk assessment consists of specific regulatory, political, and other factors, which may lead to commercial and reputational impediments in cross-border acquisitions. The outcome of the comparison is a comprehended list of evaluated risk factors, whereby the academic findings are complemented and supported by the practical experience in the business consultant＇s studies. Moreover, the practical approach points to the fact that due diligence scope needs to be suited to the dynamics of the markets. The comparison and the comprehended list of evaluated risk factors call for a more integrated system of due diligence and show herein the research deficit. Hence, the novelty is the compendium of evaluated risk factors which should be assessed in the pre-acquisition phase. The originality of the paper is given by a unique analysis of academic work about acquisition due diligence literature and consultant studies from anonymized practical experience based on insider information.
文摘The efficient market theory is a central point in finance. If the capital market is competitive, the investors cannot expect superior gains from their investment strategies with respect to the risk profile. Event studies are an approach to verify the impact of the information on the stock prices. In an efficient market, stock prices should fully, promptly, and quickly capture all the information. Instead, the market shows phenomena of an under-reaction and over-reaction for both the short and the long run. The mergers and acquisitions （M＆As） are examples of anomalies. Often, the bidder companies record the negative abnormal returns for both the short and the long run. In contrast to the efficient market theory, the empirical evidence shows that this phenomenon is widespread in all （or most of） the countries of the world. This work examines the long-run performance in M＆As. For this purpose, 40 bidders were observed in Italy during the period of 1994-2008 among listed companies. The buy and hold abnormal returns （BHARs） methodology was used, with which it was possible to observe the returns for three years following the deal.
基金supported by the National Planning Office of Philosophy and Social Science(Grant No.07BTQ011)
文摘This paper constructs a model on the factors that influence knowledge transfer in mergers and acquisitions(M&A) and validates it via questionnaire surveys. Using 125valid collected questionnaires, multiple linear regression analysis and hierarchical regression analysis showed that five out of the ten factors had a positive effect on knowledge transfer effect. The ranking of factor importance, from high to low, was knowledge explicitness, relationship quality, learning intent, advanced transfer activities, and learning capability, which is fairly consistent with positive factors observed in other interorganizational knowledge transfer researches. Our results also showed that one of the control variables(size of acquired firm) had neither a direct or indirect effect on knowledge transfer in M&A. Additionally, our research found that knowledge distance and degree of M&A integration had a positive influence on knowledge transfer effect at the early stage after M&A, but had a negative influence at the late stage. Based on this research, several suggestions for knowledge transfer in M&A are proposed.
文摘Over the past 10 years, China＇s steel industry has made a substantial development in terms of scale, and has finally become a steel giant in the world. In the upcoming 10 years, fundamental changes will be made with the economic growth in China. Against this background, China＇ s steel industry will shift from a rapid development to a slow but sound development. In order to fulfill the second leap of China＇s steel industry, based on its current developing status and characteristics, and from the perspective of both national and corporate development, mergers and acquisition are both effective ways to raise the quality of the existing stock of asset in the steel industry, while technological innovation is the solid foundation for its second leap.
基金The National Natural Science Foundationof China (No.70372057)
文摘By a linear Cournot model, the factors associated with the integration of two firms are discussed in terms of their effects on the private surplus and the social welfare in economies with varying extent of openness. Meanwhile, the trade policy of the host government is taken into account. It is concluded that the more open the economy and the more intense the competition, the less profitable the integration; the most important determinant to the changes of the domestic social welfare is the industry strength of the host country. The host authority can enhance the domestic social welfare in two ways： to adjust the trade policy and to only approve the socially desirable cross-border mergers and acquisitions.
文摘This article presents and analyses the theories with respect to mergers and acquisitions, and list why companies or firms need to be reorganised. Different types of mergers occur under different situations. Mergers between companies which have same products or services called horizontal mergers; mergers between companies which have buyer-seller relationship called vertical mergers; and companies which have different business fields always use conglomerate mergers. The main motive of companies or firms choosing merger or acquisition is synergy.
文摘This article sheds light on how synergies arise through mergers and acquisitions (M&A). Enterprises go through the process of Mergers and Acquisitions (M&A) with the goal of improving performance, increasing efficiency and obtaining business synergy. Prior literature suggests that synergies could arise due to taxes, market power or efficiency improvements. This study evaluates the efficiency of M&A in Brazil among publicly-traded companies. We used models with multiple objectives from Goal Programming and Data Envelopment Analysis (GPDEA), employing accounting indicators as input and output variables, and thus evaluated the emergence of synergy gains. These models allow us to analyze and classify the M&A according to the efficiency obtained in such processes. Some of the M&A cases analyzed were mistakenly considered efficient when used traditional models. And, as expected, the GPDEA was proved to be superior to classical models;however it was noticed that few of the cases investigated were proved to be effective. We presented a new application for multi-objective approach that can be used to assess mergers and acquisitions. The dualapplication of GPDEA provided a greater understanding of efficiency generation in synergy creation by means of M&A.
文摘Mergers and acquisitions become the major force in the changing environment. The policy of liberalization, decontrol and globalization of the economy has exposed the corporate sector to domestic and global competition. It is true that there is little scope for companies to learn from their past experience. Therefore, to determine the success of a merger, it is to be ascertained if there is financial gain from mergers. It is very important to study the liquidity performance of those companies to test whether those companies have sufficient liquid assets to meet its current obligations. The present study is limited to a sample of companies which underwent merger in the same industry during the period of 2002-2005 listed in one of the Indian stock exchange namely Bombay Stock Exchange. It is proposed to compare the liquidity performance of the thirteen sample acquirer and target companies before and after the period of mergers by using ratio analysis and t-test during the study period of three years. The study found that the shareholders of the acquirer companies increased their liquidity performance after the merger event.
文摘In recent years,the frequent adjustment of the government’s economic policies and the uncertainty of foreign economic situations have made the degree of uncertainty of China’s economic policies rise continuously.The increasing degree of policy uncertainty will inevitably affect the investment and financing decisions of micro enterprises.Then,how does economic policy uncertainty(EPU)affect mergers and acquisitions(M&A)behavior?What’s the mechanism?Based on the above questions,this paper uses the data of non-financial listed companies in the Shanghai and Shenzhen stock exchanges from 2008 to 2018 as a sample to explore the relationship between EPU and M&A.The study shows that rising EPU will promote corporate M&A behavior,and this effect is more significant in slow-growth companies.The relationship between EPU and M&A is affected by corporate governance,stock price volatility and financing constraints.Specifically,the company’s M&A size is more sensitive to EPU with higher level of corporate governance,higher level of stock price volatility,and lesser financing constraints.Further research shows that the rise of EPU will significantly promote the improvement of M&A performance in the short-term,but this effect does not exist in the long-term.Various robustness checks do not change the empirical results of this paper.
文摘By reviewing the research on the effect of corporate merger, we find that knowledge is still limited to the effect of corporate merger on industrial structure. In this article, firstly we study the effect of horizontal merger on market structure, then explore the effect of market performance on industrial structure. Finally we present a new model that can explain how horizontal merger improves the adjustment of industrial structure.
文摘The performance commitment mechanism is widely used in capital operations in China’s A-share market.As of January 2025,88 percent of the companies listed on China’s A-share market have participated in some kind of performance commitment arrangement.1Theperformance commitment mechanism,developed and deeply rooted in Chinese markets and systems,has several distinctive features.It plays a positive role in solving the problem of information asymmetry,strengthening the market credit mechanism,and avoiding tunneling.However,it also leads to some corporate governance issues.It is not uncommon to observe‘goodwill impairment’2and‘business performance plunge’3after the target company‘meets the preset targets precisely’4during the commitment period.
基金financial support from the National Natural Science Foundation of China (No.71602112)the Shanghai Educational Development Foundation Morning Project (15CG57)+1 种基金financial support from the National Natural Science Foundation of China (Nos.91746117 and 71572101)the Ministry of Education (MOE) Key Research Institute of Humanities and Social Sciences at Universities (No.16JJD790037)
文摘This paper investigates how accounting standards(AS) convergence influences Chinese firms’ overseas mergers and acquisitions(M&As) and shows that this convergence significantly promotes Chinese firms’ overseas M&As.Specifically, we find that both the probability of success and the value of transactions increases significantly in countries that implemented International Financial Reporting Standards(IFRS) prior to 2007.These results suggest that accounting standards(AS) convergence can improve the comparability of accounting information between China and other countries that have adopted IFRS.Moreover, we find that the impact of accounting standards(AS) convergence on state-owned enterprise(SOE) acquirers is weak.These findings demonstrate that accounting standards(AS) convergence can facilitate Chinese firms’ overseas M&As by improving the comparability of accounting information between China and target countries.
文摘This paper studies short sellers' trading strategies and their effects on the financial market by examining their accusations of fraud against Chinese reverse merger firms(CRMs) in the US. We find that short sellers rely on firms' fundamental information, especially relative financial indicators, to locate their "prey." Specifically, they compare a target firm's financial indicators(e.g., growth and receivables) with both the industry average and the firm's history. We find no evidence that short sellers accuse CRMs simply because of their reverse merger label. Additionally, we test the accuracy of short sellers' accusations in the long run and find that accused firms are more likely to delist and less likely to recover from price plunges. Our results also indicate that CRMs' high exposure to short sellers' accusations stem from adverse selection problems: firms with high litigation risk are more likely to choose reverse mergers to access the US capital market. Overall, our results support the view that short sellers are sophisticated investors and shed some light on their decision processes.
文摘China aims to maintain sound development of the national economy through M&As Anew round of corporate mergers and acquisitions (M&As) is on the way. On September 6, the State Council announced that it would require companies in the automobile, iron and steel, cement, machinery manufacturing, electro- lytic aluminum and rare earth industries to accelerate M&As.
