The study on key influencing factors of mergers and acquisitions performance based on China state-owned listed enterprises

Abstract

Purpose – The purpose of this paper is to analyze the key influencing factors which affect the performance of M & A and the key influencing factors by establishing grey relational sequence model. The results can not only perfect the current existing theoretical system, but also provide theoretical guide for M & A practice. Design/methodology/approach – First of all, this paper analyzes the M & A performance through the literature reviews, and then establishes the grey model about M & A performance from three influencing factors: profitability, operational and development capacity to analyze its key influencing factors which affect M & A performance. Furthermore, the key factors influencing of M & A performance are analyzed, the results can be obtained through the analysis of the grey relative degree based on six years’ data of state-owned enterprises. Findings – In this paper, some results can be found that ownership restriction and executive compensation can significantly affect corporate profitability and operation ability. M & A and institutional investors can be affected greater from the perspective of development ability and profitability. In general, enterprise scale has little affect on the performance after M & A. Practical implications – With the sustainable development of economic globalization, M & A has become an important strategy for the rapid growth of the enterprise, enlargement market and brand effect. But the performance after M & A in most enterprises does not improve. As the pillar of the national economy, state-owned enterprises have an important impact on China’s economic development and urgently need to be reformed. Originality/value – This paper analyzes the key factors through establishing grey relative sequence model to analyze the correlation of M & A performance and influencing factors, and finds key influencing factors which affect the performance of M & A. The conclusion can provide policy guidance for the improvement of M & A performance in the future.

Does High-Speed Railway Opening Improve the M&A Behavior?

“…Lee et al (2019) found that in an emerging economy with less developed capital markets and insufficient investor protection, product market competition improves market efficiency for corporate control in an emerging economy, supporting the complementary hypothesis between product market competition and corporate takeover [22]. About the external factors, studies have investigated the impact of board networks (Renneboog and Zhao, 2014; Cai and Sevilir, 2012) [23,24] and executive incentive (Grinstein and Hribar, 2004;Zhao et al, 2016) [25,26] on enterprise M&A behavior. Renneboog and Zhao (2014) investigated the impact of social network on the corporate M&A process from the perspective of board networks, finding that friendly social contacts make the acquirer company more active in the M&A process and that the information gathering ability of directors and interlocking directors can improve the success rate of M&A while shortening the negotiation time [23].…”

“…Based on an executive incentive perspective, Grinstein and Hribar (2004) showed that CEOs receive higher bonus incentives when M&A deals are larger, and this incentive makes CEOs put more effort into closing M&A agreements [25]. In addition, Zhao et al (2016) explored the key factors that influence the performance of corporate M&A in state-owned enterprises and found that increasing executive compensation can significantly improve the post-merger profitability of state-owned enterprises [26].…”

Grey system theory in sustainable development research—a literature review (2011−2021)

“…Ou (2016) puts forward an integrated model based on GRA, decision-making trial and evaluation laboratory, analytic network process and the technique for solving a corporate sustainability performance evaluation and ranking problem. Zhao et al (2016b) analyze the key influencing factors which affect the performance of M&A and the key influencing factors by establishing grey relational sequence model. With global market competition, product family design and a platform-based strategy have received a lot of attention for providing sufficient variety of products in an economical way.…”

Institutional Shareholders’ Role Analysis on Cross-Border M&A Deals in Asia Pacific Region

“…There are several factors driving the company in making decisions to conduct M&A deals, including the existence of institutional shareholders in the company [5]. Several previous studies have identified that institutional shareholders can influence the decision-making process in the company.…”