Director Connection and Target Selection of M&A from the Perspective of Resource Dependence

DOI

10.2991/assehr.k.211122.174How to use a DOI?

Keywords

M&A; Director linkage; Information asymmetry; Private information

Abstract

Based on the resource dependence theory, this paper selects 549 M&A events of Chinese A-share listed companies from 2003 to 2014, and forms M&A transaction samples according to different criteria to test the role of director connection in solving the information asymmetry problem in M&A process. The results show that the company with director connection is more likely to be selected as the M&A target, and the director connection can effectively reduce the degree of information asymmetry between the two parties. When the potential target company or M&A company has serious value information asymmetry, the private information transmitted by director connection becomes more valuable, and director connection can make better use of its information advantages and have a greater impact on the selection of M&A target. Director connection provides an effective channel for the transmission of private information in the process of merger and acquisition, which can slow down the inefficient behavior caused by information asymmetry in the process of M&A.

Copyright

© 2021 The Authors. Published by Atlantis Press SARL.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Haoyang Wu
AU  - Jiali Yao
PY  - 2021
DA  - 2021/11/23
TI  - Director Connection and Target Selection of M&A from the Perspective of Resource Dependence
BT  - Proceedings of the 7th International Conference on Social Science and Higher Education (ICSSHE 2021)
PB  - Atlantis Press
SP  - 652
EP  - 657
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.211122.174
DO  - 10.2991/assehr.k.211122.174
ID  - Wu2021
ER  -