Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market

Ruoyu Wang

doi:doi:10.11648/j.si.20231103.12

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Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market

Ruoyu Wang

Published in Science Innovation (Volume 11, Issue 3)

Received: 1 April 2023 Accepted: 6 May 2023 Published: 18 May 2023

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Abstract

Due to the current favorable economic situation in our country, companies are expanding their distribution scope by acquiring other small and medium-sized enterprises, leading to the emergence of goodwill in mergers and acquisitions. Investment efficiency is also an essential indicator for companies as it reflects their return on investment. Therefore, this article aims to find the relationship between the two through literature analysis and empirical research. Firstly, the origin and evolution of goodwill and the factors related to investment efficiency were analyzed through past literature, and the relevant theories related to goodwill in mergers and acquisitions and investment efficiency were discussed. Subsequently, the reasons for setting up research hypotheses were explained, and the corresponding sample selection was briefly summarized. Through regression analysis of variables and robustness tests, two conclusions were drawn. First, goodwill in mergers and acquisitions increased a company's non-efficiency investment, thereby reducing investment efficiency. Second, the inclusion of audit quality in the variables weakened the impact of goodwill in mergers and acquisitions on a company's investment efficiency. Therefore, two policy recommendations were proposed: to reduce a company's goodwill in mergers and acquisitions and to choose audit firms with relatively higher audit quality.

Published in	Science Innovation (Volume 11, Issue 3)
DOI	10.11648/j.si.20231103.12
Page(s)	104-110
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Merger and Acquisition, Goodwill Efficiency of Investment, A-Share Listed Companies

References

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Ruoyu Wang. (2023). Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market. Science Innovation, 11(3), 104-110. https://doi.org/10.11648/j.si.20231103.12

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ACS Style

Ruoyu Wang. Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market. Sci. Innov. 2023, 11(3), 104-110. doi: 10.11648/j.si.20231103.12

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AMA Style

Ruoyu Wang. Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market. Sci Innov. 2023;11(3):104-110. doi: 10.11648/j.si.20231103.12

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@article{10.11648/j.si.20231103.12,
  author = {Ruoyu Wang},
  title = {Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market},
  journal = {Science Innovation},
  volume = {11},
  number = {3},
  pages = {104-110},
  doi = {10.11648/j.si.20231103.12},
  url = {https://doi.org/10.11648/j.si.20231103.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.si.20231103.12},
  abstract = {Due to the current favorable economic situation in our country, companies are expanding their distribution scope by acquiring other small and medium-sized enterprises, leading to the emergence of goodwill in mergers and acquisitions. Investment efficiency is also an essential indicator for companies as it reflects their return on investment. Therefore, this article aims to find the relationship between the two through literature analysis and empirical research. Firstly, the origin and evolution of goodwill and the factors related to investment efficiency were analyzed through past literature, and the relevant theories related to goodwill in mergers and acquisitions and investment efficiency were discussed. Subsequently, the reasons for setting up research hypotheses were explained, and the corresponding sample selection was briefly summarized. Through regression analysis of variables and robustness tests, two conclusions were drawn. First, goodwill in mergers and acquisitions increased a company's non-efficiency investment, thereby reducing investment efficiency. Second, the inclusion of audit quality in the variables weakened the impact of goodwill in mergers and acquisitions on a company's investment efficiency. Therefore, two policy recommendations were proposed: to reduce a company's goodwill in mergers and acquisitions and to choose audit firms with relatively higher audit quality.},
 year = {2023}
}

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TY  - JOUR
T1  - Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market
AU  - Ruoyu Wang
Y1  - 2023/05/18
PY  - 2023
N1  - https://doi.org/10.11648/j.si.20231103.12
DO  - 10.11648/j.si.20231103.12
T2  - Science Innovation
JF  - Science Innovation
JO  - Science Innovation
SP  - 104
EP  - 110
PB  - Science Publishing Group
SN  - 2328-787X
UR  - https://doi.org/10.11648/j.si.20231103.12
AB  - Due to the current favorable economic situation in our country, companies are expanding their distribution scope by acquiring other small and medium-sized enterprises, leading to the emergence of goodwill in mergers and acquisitions. Investment efficiency is also an essential indicator for companies as it reflects their return on investment. Therefore, this article aims to find the relationship between the two through literature analysis and empirical research. Firstly, the origin and evolution of goodwill and the factors related to investment efficiency were analyzed through past literature, and the relevant theories related to goodwill in mergers and acquisitions and investment efficiency were discussed. Subsequently, the reasons for setting up research hypotheses were explained, and the corresponding sample selection was briefly summarized. Through regression analysis of variables and robustness tests, two conclusions were drawn. First, goodwill in mergers and acquisitions increased a company's non-efficiency investment, thereby reducing investment efficiency. Second, the inclusion of audit quality in the variables weakened the impact of goodwill in mergers and acquisitions on a company's investment efficiency. Therefore, two policy recommendations were proposed: to reduce a company's goodwill in mergers and acquisitions and to choose audit firms with relatively higher audit quality.
VL  - 11
IS  - 3
ER  -

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Author Information

Ruoyu Wang

School of Management Mpacc, University of Shanghai for Science and Technology, Shanghai, China

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Plain Text BibTeX RIS

APA Style

Ruoyu Wang. (2023). Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market. Science Innovation, 11(3), 104-110. https://doi.org/10.11648/j.si.20231103.12

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ACS Style

Ruoyu Wang. Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market. Sci. Innov. 2023, 11(3), 104-110. doi: 10.11648/j.si.20231103.12

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AMA Style

Ruoyu Wang. Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market. Sci Innov. 2023;11(3):104-110. doi: 10.11648/j.si.20231103.12

Copy | Download

@article{10.11648/j.si.20231103.12,
  author = {Ruoyu Wang},
  title = {Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market},
  journal = {Science Innovation},
  volume = {11},
  number = {3},
  pages = {104-110},
  doi = {10.11648/j.si.20231103.12},
  url = {https://doi.org/10.11648/j.si.20231103.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.si.20231103.12},
  abstract = {Due to the current favorable economic situation in our country, companies are expanding their distribution scope by acquiring other small and medium-sized enterprises, leading to the emergence of goodwill in mergers and acquisitions. Investment efficiency is also an essential indicator for companies as it reflects their return on investment. Therefore, this article aims to find the relationship between the two through literature analysis and empirical research. Firstly, the origin and evolution of goodwill and the factors related to investment efficiency were analyzed through past literature, and the relevant theories related to goodwill in mergers and acquisitions and investment efficiency were discussed. Subsequently, the reasons for setting up research hypotheses were explained, and the corresponding sample selection was briefly summarized. Through regression analysis of variables and robustness tests, two conclusions were drawn. First, goodwill in mergers and acquisitions increased a company's non-efficiency investment, thereby reducing investment efficiency. Second, the inclusion of audit quality in the variables weakened the impact of goodwill in mergers and acquisitions on a company's investment efficiency. Therefore, two policy recommendations were proposed: to reduce a company's goodwill in mergers and acquisitions and to choose audit firms with relatively higher audit quality.},
 year = {2023}
}

Copy | Download

TY  - JOUR
T1  - Empirical Study on the Impact of Goodwill in Mergers and Acquisitions on Investment Efficiency of Listed Companies in A-Share Market
AU  - Ruoyu Wang
Y1  - 2023/05/18
PY  - 2023
N1  - https://doi.org/10.11648/j.si.20231103.12
DO  - 10.11648/j.si.20231103.12
T2  - Science Innovation
JF  - Science Innovation
JO  - Science Innovation
SP  - 104
EP  - 110
PB  - Science Publishing Group
SN  - 2328-787X
UR  - https://doi.org/10.11648/j.si.20231103.12
AB  - Due to the current favorable economic situation in our country, companies are expanding their distribution scope by acquiring other small and medium-sized enterprises, leading to the emergence of goodwill in mergers and acquisitions. Investment efficiency is also an essential indicator for companies as it reflects their return on investment. Therefore, this article aims to find the relationship between the two through literature analysis and empirical research. Firstly, the origin and evolution of goodwill and the factors related to investment efficiency were analyzed through past literature, and the relevant theories related to goodwill in mergers and acquisitions and investment efficiency were discussed. Subsequently, the reasons for setting up research hypotheses were explained, and the corresponding sample selection was briefly summarized. Through regression analysis of variables and robustness tests, two conclusions were drawn. First, goodwill in mergers and acquisitions increased a company's non-efficiency investment, thereby reducing investment efficiency. Second, the inclusion of audit quality in the variables weakened the impact of goodwill in mergers and acquisitions on a company's investment efficiency. Therefore, two policy recommendations were proposed: to reduce a company's goodwill in mergers and acquisitions and to choose audit firms with relatively higher audit quality.
VL  - 11
IS  - 3
ER  -

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