Tax incentive and corporate M&A:evidence from the accelerated depreciation policy of fixed assets
Based on the data of A-share listed companies in China from 2011 to 2018,this paper uses the accelerated depreciation policies of fixed assets in 2014 as an exogenous shock and investigates the im-pact of tax incentive on corporate M&A activities by the DID method.Results indicate that the accelerated depreciation policy significantly promotes corporate M&A activities,manifested by both an increase in the number and an expansion of the scale of corporate M&A transactions.The policy has a greater impact on state-owned corporates,corporates with a lower proportion of fixed assets,and those with higher analyst coverage.The mechanism of analysis shows that the accelerated depreciation policy promotes M&A activi-ties by alleviating corporate financing constraints.Further analysis finds that the accelerated depreciation pol-icy increases cash deals and improves the market performance of corporate M&A activities.
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