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| Research on the Impact of Capital Structure Adjustment on Enterprise M&As |
| WANG Jinren，CHEN Yizhi，PAN Min |
| 1.Hunan University, Changsha, China; 2.Wuhan University, Wuhan, China |
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Abstract Using M&As data of Chinese A-share listed companies from 2010 to 2020, this study theoretically and empirically examines the impact and economic consequence of capital structure adjustment on enterprise M&As. The results show that capital structure adjustment inhibits enterprise M&As and this inhibitory effect is mainly reflected in over indebted enterprises. The mechanism tests show that intensified financing constraints and reduced agency costs are potential pathways for capital structure adjustment to inhibit M&As of over indebted enterprises. The heterogeneity tests show that the above inhibitory effects are concentrated in the regions with higher levels of financial development, and in the enterprises with poor internal control quality or those are non-state-owned. The economic consequence test confirms that capital structure adjustment can enhance the M&As performance of over indebted enterprises.
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Received: 30 October 2023
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