Corporate Digital Transformation and M&A Efficiency: Evidence Based on Chinese Listed Companies

Gui Ren, Zhenxian Huo (), Jingjing Wang and Xihe Liu
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Gui Ren: Department of Finance, School of Economics, Shanghai University, Shanghai 200444, China
Zhenxian Huo: Department of Finance, School of Economics, Shanghai University, Shanghai 200444, China
Jingjing Wang: Department of Finance, School of Economics, Shanghai University, Shanghai 200444, China
Xihe Liu: Department of Finance, School of Economics, Shanghai University, Shanghai 200444, China

IJFS, 2023, vol. 11, issue 4, 1-18

Abstract: In order to help enterprises to achieve high-quality development and improve the capital market regulatory policies by supporting with more factual basis from China, this paper conducts research on clarifying impact mechanism of digital transformation on M&A efficiency of listed companies. Taking the mergers and acquisitions of listed companies from 2007 to 2021 as a research sample, the influence mechanism of the digital transformation degree of companies on their M&A efficiency was studied. The research results show that the digital transformation of listed companies will improve their M&A efficiency. Digital transformation will reduce the degree of mispricing stocks of M&A companies, curb conflicts between managers and agents of M&A companies, and improve their M&A efficiency. Further research finds that the promotion effect of digital transformation on M&A efficiency is more significant in non-state-owned companies, with a higher degree of financing constraint and high analyst attention. In the future, regulatory authorities should actively promote the digital transformation of listed companies, curb mispricing and management agency problems in the capital market with digital governance, and improve the efficiency of mergers and acquisitions in the capital market. This paper not only provides a more factual basis on concrete case from China but also enriches the related empirical analysis on corporate digital transformation and M&A efficiency.

Keywords: digital transformation; mispricing in capital markets; M&A efficiency; agency issues (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
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