Cash Holdings and M &A Performance: Evidence from China’s GEM Market

Abstract

As a form of enterprise’s external expansion, merges and acquisitions (M &A) activities have been the focus of research in recent years. This paper selected growth enterprise market (GEM) companies from 2011 to 2017 includes 809 observations as the sample to explore the impact of cash holdings on merger and acquisition performance. It was found that cash holding has no significant effect on the short-term merges and acquisitions (M &A) performance, and has a significant positive correlation effect on the long-term merges and acquisitions (M &A) performance. Further research found that when internal control is a moderator, it can strengthen the positive correlation effect of cash holding on the long-term performance of M &A. Under the condition of cash payment or over-funding or no financial advisor, there is no significant positive correlation between long-term performance and cash holding.