Impact of Conducting Mergers and Acquisitions on Relieving Financial Constraint Based on the Evidence from Chinese Listed Companies

DOI

10.2991/emle-16.2017.6How to use a DOI?

Keywords

financial constraint; M&A; cash flow; Tobin Q

Abstract

This paper studies the relationship between M&A and relieving financial constraint. This paper hypothesizes that M&A transactions can relieve the financial constraint of firm. It models the relation between investment expenditure and internal cash flow. The extent to relieved financial constraint is captured by sensitivity of investment to interaction term between cash flow and dummy MA. Study empirically tests the sensitivities by using 150 Chinese listed companies who conducted M&A transactions during 2011 to 2014.using both Eviews 8 and SPSS 17.0 for data analysis and processing, the conclusion is obtained that the financial constraint is relieved after conducting M&A.

Copyright

© 2017, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Yunhe Deng
AU  - Jian Wu
PY  - 2016/12
DA  - 2016/12
TI  - Impact of Conducting Mergers and Acquisitions on Relieving Financial Constraint Based on the Evidence from Chinese Listed Companies
BT  - Proceedings of the 2016 2nd International Conference on Economy, Management, Law and Education (EMLE 2016)
PB  - Atlantis Press
SP  - 29
EP  - 35
SN  - 2352-5428
UR  - https://doi.org/10.2991/emle-16.2017.6
DO  - 10.2991/emle-16.2017.6
ID  - Deng2016/12
ER  -