Does Operating Performance Improve after Merger & Acquisition? Evidence from Chinese Listed Companies  

Oleh:

Yang, Chi-Yih ; Ding, Xiaoming ; Zhou, Chen

Jenis: Article from Proceeding
Dalam koleksi: The International Symposium on Social Sciences (TISSS) and Hong Kong International Conference on Education, Psychology and Society (HKICEPS) at Hongkong, December 2013, page 389-397.
Topik: merger & acquisition; operating performance; efficiency; profitability; China
Fulltext: Hong Kong-Conference 59.pdf (413.99KB)

Isi artikel

This paper examines the change of operating performance subsequent to merger and acquisition (M&A) in Chinese listed acquirers during the period between 2004 and 2008. Using asset turnover as proxy for efficiency, and return on asset as measure for profitability, the results suggest that asset turnover increases significantly in acquiring firms following M&A. Meanwhile, although return on asset improves after M&A, it is statistically insignificant. It can be concluded that M&A leads to significant improvement in efficiency while makes no difference to profitability in China. This paper also finds that, acquirers’ preacquisition stock performance, industry relatedness between acquiring and target firms, and financial leverage have positive impact on post-acquisition efficiency, while CEO duality is negatively associated with efficiency change.

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