The Impact of M&A on Financial Performance from the Perspective of Life Cycle

Yuan Chen; Wei Wang; Yaqiong Cao; Ye Chen

doi:10.5755/j01.ee.37.3.40482

Authors

Yuan Chen Shenyang Ligong University, China
Wei Wang Shenyang Ligong University, China
Yaqiong Cao Shenyang Ligong University, China
Ye Chen Shenyang Ligong University, China

DOI:

https://doi.org/10.5755/j01.ee.37.3.40482

Keywords:

Life Cycle, Mergers and Acquisitions, Financial Performance, Synergies

Abstract

Based on the theory of enterprise life cycle and the theory of M&A synergy, this paper selects the successful cases of M&A of A-share listed companies in Shanghai and Shenzhen from 2000 to 2020 as the research object, and takes their financial data from 2000 to 2023 as the research sample, and empirically studies the impact of M&A on the financial performance of enterprises in the growth, maturity and recession stages. The results show that M&A in the growth stage can help to enhance the market position and competitiveness of enterprises, that is, to enhance the development ability. The implementation of mergers and acquisitions by mature enterprises can significantly improve the profitability, operation and debt repayment ability of enterprises, but cannot significantly improve the development ability. During the recession period, enterprises can improve their solvency and stabilize their financial status through asset restructuring and optimization. Therefore, it is necessary to accurately identify the life cycle of the enterprise before implementing M&A activities, and continuously monitor and evaluate it in order to seize the opportunity to grow rapidly in the wave of M&A.

Author Biographies

Yuan Chen, Shenyang Ligong University, China

Yuan Chen is an Associate Professor at the School of Economics and Management, Shenyang Ligong University (China), and a Master's Supervisor. She received her Master's degree from Shenyang Ligong University. She has presided over and completed multiple provincial-level scientific research and teaching reform projects. Her research interests lie in financial management, primarily focusing on capital structure, investment decisions, and corporate value creation, with an emphasis on corporate financial resource allocation and risk management.
Wei Wang, Shenyang Ligong University, China

Wei Wang received his Master's degree from the School of Economics and Management, Shenyang Ligong University (China). His research interests lie in financial performance, primarily focusing on profitability analysis, operational efficiency, and solvency assessment, with an emphasis on the drivers of corporate performance and its evaluation methods.
Yaqiong Cao, Shenyang Ligong University, China

Yaqiong Cao is a Master's Degree Candidate at the School of Economics and Management, Shenyang Ligong University (China). Her research focuses on financial management, internal control, primarily focusing on the design of internal control systems, corporate governance, and risk management, with an emphasis on the role of internal control in organizational transparency and operational efficiency.
Ye Chen, Shenyang Ligong University, China

Ye Chen is a Master's Degree Candidate at the School of Economics and Management, Shenyang Ligong University (China). Her research interests lie in accounting, primarily focusing on accounting information quality, earnings management, and financial reporting standards, with an emphasis on the impact of accounting practices on corporate decision-making and information disclosure