Can Distressed Companies Get out of Financial Distress through M&A？

doi:10.16382/j.cnki.1000-5579.2022.05.015

Abstract

Abstract:

M&A is an important way to optimize the allocation of resources. A deep study of the important role of M&A in helping distressed companies get out of financial distress will help to offer a feasible path for companies to achieve high-quality development. The existing literatures on the M&A related to financial distressed companies mostly treat distressed companies as the targets, while ignoring financial distressed companies as acquirers in corporate M&A. To fill this gap, we investigate the short-term value and post-merger performance of distressed companies as acquirers over the period of 2004-2015. The results indicate that M&A of financial distressed companies can not only create positive short-term market value, but also improve the long-term performance of the companies. We further find that the long-term post-merger performance of distressed companies can be improved through reducing the financial slack, and through improving corporate debt payment ability. These results provide new evidence for China′s financial distress companies to get rid of financial distress through M&A, which has important enlightening significance.

Key words: financial distress, corporate M&A, long-term performance, short-term market value

Yun-he LI, Lin-ran ZHU, Zhuo-hong TAN, Zhang-yu QIAN. Can Distressed Companies Get out of Financial Distress through M&A？[J]. Journal of East China Normal University (Philosophy and Social Sciences), 2022, 54(5): 161-174.

Figures/Tables 8

References 0

	陈艳利、赵红云、戴静静, 2015, 《政府干预、产权性质与企业脱困》, 《经济学动态》第7期, 第80—90页.
	蒋春燕、赵曙明, 2004, 《组织冗余与绩效的关系: 中国上市公司的时间序列实证研究》, 《管理世界》第 5期, 第108—115页.
	李晓翔、刘春林, 2011, 《冗余资源、并购行为和剥离行为: 一项关于我国ST企业的配对研究》, 《经济管理》第6期, 第59—68页.
	李曜、丛菲菲, 2015, 《产业竞争下的民企资本结构选择—兼以苏宁云商为例》, 《会计研究》第4期, 第47—54页.
	骆家駹、崔永梅、陈雯、李霞, 2017, 《并购财务困境企业整合路径研究—以国机并购二重为例》, 《会计研究》第7期, 第69—74页.
	唐建新、贺虹, 2005, 《中国上市公司并购协同效应的实证分析》, 《经济评论》第5期, 第93—100页.
	吴超鹏、吴世农、郑方镳, 2008, 《管理者行为与连续并购绩效的理论与实证研究》, 《管理世界》第7期, 第126—133页.
	徐昭, 2017, 《上市公司市值管理的有效性研究—基于企业并购绩效的实证分析》, 《经济理论与经济管理》第1期, 第68—83页.
	张新, 2006, 《并购重组是否创造价值?——中国证券市场的理论与实证研究》, 《经济研究》第6期, 第20—29页.
	章之旺、吴世农, 2006, 《财务困境成本理论与实证研究综述》, 《会计研究》第5期, 第73—79页.
	赵健梅、王春莉, 2003, 《财务危机预警在我国上市公司的实证研究》, 《数量经济技术经济研究》第7期, 第134—138页.
	周小春、李善民, 2008, 《并购价值创造的影响因素研究》, 《管理世界》第5期, 第134—143页.
	朱武祥、魏炜、王正位, 2014, 《回归经典: 资本结构研究60年思考》, 《金融研究》第12期, 第194—206页.
	祝继高、齐肖、汤谷良, 2015, 《产权性质、政府干预与企业财务困境应对—基于中国远洋、尚德电力和李宁公司的多案例研究》, 《会计研究》第5期, 第28—34页.
	Altman, E. I. , 1968, “Financial Ratios, Discriminant Analysis and the Prediction of Corporate Bankruptcy”, The Journal of Finance, Vol. 23, No. 4: 589-609.
	Altman, E. I. , 2013, “Predicting Financial Distress of Companies: Revisiting the Z-Score and ZETA® Models”, Edward Elgar Publishing, Vol. 53: 428-456.
	Ansoff, H. L. , 1965, Corporate Strategy, New York: McGraw-Hill.
	Baker, T. and Nelson, R. E. , 2005, “Creating Something from Nothing: Resource Construction through Entrepreneurial Bricolage”, Administrative Science Quarterly, Vol. 50, No. 3: 329-366.
	Barney. , J. B. , 1986, “Strategic Factor Markets: Expectations, Luck, and Business Strategy”, Management Science, Vol. 32, No. 10: 1 231-1 241.
	Bruner, R. F. , 2002, “Does M & A Pay? A Survey of Evidence for the Decision-Maker”, Journal of Applied Finance, Vol. 12, No. 1: 48-68.
	Clark. , K. and Ofek, E. , 1994, “Mergers as a Means of Restructuring Distressed Firms: An Empirical Investigation”, Journal of Financial and Quantitative Analysis, Vol. 29, No. 4: 541-565.
	Comanor. , W. S. , 1967, “Market Structure, Product Differentiation, and Industrial Research”, Quarterly Journal of Economics, Vol. 81, No. 4: 639-657.
	Kam, A. , Citron, D. and Muradoglu, G. , 2010, “Financial Distress Resolution in China—Two Case Studies”, Qualitative Research in Financial Markets, Vol. 2, No. 2: 46-79.
	Malatesta, P. H. , 1983. “The Wealth Effect of Merger Activity and the Objective Functions of Merging Firms”, Journal of Financial Economics, Vol. 11, No. 1-4: 155-181.
	Maloney, M. T. , McCormick, R. E. and Mitchell, M. L. , 1993, “Managerial Decision Making and Capital Structure”, Journal of Business, Vol. 66, No. 2: 189-217.
	Masulis, R. W. , Wang, C. and Xie, F. , 2007, “Corporate Governance and Acquirer Returns”, Journal of Finance, Vol. 62, No. 4: 1 851-1 889.
	McCardle, K. F. and Viswanathan, S. , 1994, “The Direct Entry versus Takeover Decision and Stock Price Performance around Takeovers”, Journal of Business, Vol. 67: 1-43.
	Moeller, S. B. , Schlingemann, F. P. and Stulz, R. M. , 2004, “Firm Size and the Gains from Acquisitions”, Journal of Financial Economics, Vol. 73: 201-228.
	Ohlson, J. , 1980, “Financial Ratios and the Probabilistic Prediction of Bankruptcy”, Journal of Accounting Research, Vol. 18, No. 1: 109-131.
	Porter, M. E. , 1980, Competitive Strategy: Techniques for Analyzing Industries and Competitors, New York: Free Press.
	Renneboog, L. and Vansteenkiste, C. , 2019, “Failure and Success in Mergers and Acquisitions”, Journal of Corporate Finance, Vol. 58, No. 10: 650-699.
	Shimizu, K. , Hitt, M. A. , Vaidyanath, D. and Pisano, V. , 2004, “Theoretical Foundations of Cross-Border Mergers and Acquisitions: A Review of Current Research and Recommendations for the Future”, Journal of International Management, Vol. 10, No. 3: 307-353.
	Sobel, M. E. , 1982, “Asymptotic Confidence Intervals for Indirect Effects in Structural Equation Models”, Sociological Methodology, Vol. 13, No. 1: 290-312.
	Sudarsanam, S. and Lai, J. , 2001, “Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis”, British Journal of Management, Vol. 12, No. 3: 183-199.
	Tan, J. and Peng, M. W. , 2003, “Organizational Slack and Firm Performance during Economic Transitions: Two Studies from an Emerging Economy”, Strategic Management Journal, Vol. 24, No. 13: 1249-1263.
	Zhang, E. Q. , 2022, “Why Are Distressed Firms Acquisitive?” Journal of Corporate Finance, Vol. 72, No1: 102-126.
	Zmijewski, M. , 1984, “Methodological Issues Related to the Estimation of Financial Distress Prediction Models”, Journal of Accounting Research, Vol. 22, No. 1: 59-82.

变量名	观测样本	Mean	SD	Min	Median	Max
Panel A：被解释变量：财务绩效
ΔROA	4 806	?0.001	0.095	?0.101	?0.005	0.645
ΔROE	4 806	?0.002	0.123	?0.521	?0.002	0.338
Panel B：解释变量：并购指标
MA	4 806	0.109	0.049	0	0	1
Panel C：控制变量
Asset	4 806	21.021	1.297	14.48	21.418	30.102
Cash	4 806	18.15	1.52	7.738	18.647	26.58
Reve	4 806	20.221	1.579	10.611	20.809	27.817
Tax	4 806	0.161	1.446	?88.295	0.155	26.817
EPS	4 806	0.23	0.605	?7.057	0.182	6.428
Leve	4 806	0.61	0.857	0.101	0.506	0.951
Opeca	4 806	19.742	1.126	11.953	19.802	24.583
Cashasset	4 806	0.15	0.191	?0.003	0.11	10.308
Panel D：中介机制
QR	4 806	?0.112	0.897	?1.307	?0.215	2.558
InterestCov	4 806	2.316	1.411	?1.481	1.986	3.393

事件窗口	CAAR	SD	T-value
[-1，1]	0.007*	0.051	1.695
[-2，2]	0.009*	0.068	1.864

	CAR
	[-1,1]		[-2,2]
Risk（25%）	0.013^*（1.717）	0.012^**（2.152）	0.015^*（1.758）	0.013^**（2.303）
Asset		?0.005^***（?2.894）		?0.006^***（?3.308）
Cash		?0.001（?0.923）		?0.001（?7.133）
Reve		?0.001（?0.567）		?0.002（?0.389）
Tax		?0.001（?1.258）		?0.001（?1.326）
EPS		0.251^***（7.435）		0.227^***（7.021）
Leve		?0.025（?1.533）		?0.031（?1.468）
Opeca		?0.002（?1.497）		?0.002（?1.328）
Cashasset		?0.016（?0.786）		?0.021（?0.891）
Constant	?0.076^***（?3.787）	0.620^***（5.211）	?0.079^***（?3.867）	0.613^***（5.336）

	ΔROA
	Risk(25%)		Z值≤1.8
MA	0.032^*(1.871)	0.023^***(5.526)	0.013^**(2.171)	0.013^***(3.141)
Asset		?0.027^***(?3.194)		?0.026^***(?3.264)
Cash		?0.004(?1.123)		?0.001(?0.085)
Reve		?0.002(?0.281)		?0.006(?1.124)
Tax		?0.001(?1.222)		?0.002^**(?2.218)
EPS		0.162^***(9.735)		0.154^***(9.350)
Leve		?0.028(?1.213)		?0.005(?0.716)
Opeca		?0.004(?1.592)		?0.003(?1.391)
Cashasset		?0.003(?0.216)		0.002(0.227)
Constant	?0.093^***(?2.678)	0.750^***(6.042)	?0.058^***(?3.299)	0.707^***(6.153)
N	4806	4806	5575	5575

	第一阶段				第二阶段
	ΔROA		QR		ΔROA		ΔROA
MA	0.032^* (1.871)	0.023^*** (5.526)	?0.463^*** (?20.936)	?0.379^*** (?10.205)			0.029^* (1.871)	0.020^*** (5.526)
QR					?0.035^* (?1.750)	?0.021^*** (?2.783)	?0.016^* (?1.790)	?0.013^* (?1.717)
Asset		?0.027^*** (?3.194)		?0.182^*** (?4.733)		?0.030^*** (?3.113)		?0.032^*** (?3.283)
Cash		?0.004 (?1.123)		?0.012 (?0.939)		?0.003 (?0.812)		?0.003 (?0.856)
Reve		?0.002 (?0.281)		0.040^* (1.786)		?0.003 (?0.501)		?0.001 (?0.148)
Tax		?0.001 (?1.222)		0.003 (0.594)		?0.002^** (?2.172)		?0.001 (?1.590)
EPS		0.162^*** (9.735)		0.164^*** (4.208)		0.160^*** (10.345)		0.162^*** (10.302)
Leve		?0.028 (?1.213)		?0.232^** (?2.536)		?0.030 (?1.267)		?0.030 (?1.501)
Opeca		?0.004 (?1.592)		0.094^*** (?4.296)		?0.001 (?0.282)		?0.002 (?0.585)
Cashasset		?0.003 (?0.216)		1.100 (1.400)		0.006 (0.513)		0.002 (0.337)
Constant	?0.093^*** (?2.867)	0.750^*** (6.042)	?0.385^*** (?4.987)	1.223^*** (5.015)	?0.077 (?1.162)	0.676^*** (6.071)	?0.083^*** (?2.667)	0.687^*** (6.448)