The Relationship between Corporate Governance and Performance of M & A

• Main Authors: CHANG, SHU-YUN, 張淑雲
• Other Authors: SHIUE MIN- JENG
• Format: Others
• Language: zh-TW
• Published: 2014
• Online Access: http://ndltd.ncl.edu.tw/handle/13915830093440284094

碩士 === 國立臺北大學 === 會計學系 === 102 === Since the 1930s, the United States began to explore issues related to corporate governance. The Asian countries after the 1997 financial crisis have gradually appealed to corporate to pay attention to corporate governance. "Corporate governance" enables enterprises, through good management and monitoring system or mechanism, protect the interests of all stakeholders - shareholders, creditors, employees, other stakeholders, and so on. Thus, it ensures the effective supervision of operational activities for the organization, prevents illegal behavior and malpractices, and help enterprise fulfill its social responsibilities. In the liberalization wave of 1980 and 1990, M & A activities were booming. Corporate seek opportunities of M&A to enhance operational efficiency, maximize values and enhance their market share. The mergers and acquisitions never stop by the financial turmoil and economic downturn. Previous studies have mostly discussed the relevance between corporate governance and M&A from the company's point of view and focused on how the shareholding structure or company directors and supervisors seats affect post-merger performance. This study explored the target company’s post-merger performance in relation to its corporate governance such as ownership structure, reinvestment rate, and related party transactions The study sample data were taken from TEJ database from 2007 to 2011 based on Taiwan listed companies for mergers and acquisitions, to explore the correlation between the Target Company's post-merger performance and corporate governance. In terms of explanatory variables, this study investigated in detail with corporate governance variables and control variables. Corporate governance variables used in the study are from the TEJ database - Corporate Governance module ownership and control of the deviation (including directors' shareholding ratio and largest shareholder rate) and the fair treatment of shareholders (including reinvestment of total assets ratio, the relationship between man into sales ratio and director compensation accounted for net profit before tax). Control variables are the size of the target company’s assets. For the explained variables, the five synergy ratios (cost of sales ratio, return on total assets, return on equity, financial leverage and market share) in Lin, Chan-Jane and Anne Wu’s empirical research on Taiwanese corporate’ merger synergy and performance in 1992 are used to examine the main company’s post- merger synergies in operations, finance and marketing. Ordinary Least Squares, referred as OLS or Logistic regression model is used to explore the impact of corporate governance on M & A performance. The results found that the amount of the target company's reinvestment high proportion of total assets who have significant M & A performance correlation. In addition, in the past scholars believe that the ownership structure after the merger will affect the performance, but this study found that the correlation is not strong Keywords: corporate governance, mergers and acquisitions, M & A synergy