An Empirical Study on the Impact of Performance Commitment on Evaluating Value-added Rate in Mergers and Acquisitions
Performance commitment is an important means to relieve information asymmetry,reduce risk and improve M&Acquisitions performance in corporate Mergers and Acquisitions.This paper takes the major asset reorganization events in the Shanghai and Shenzhen A-share markets from 2015 to 2021 as samples to study the impact and mechanism of performance commitment,its specific terms,and the coexistence of multiple terms on the evaluation of value-added rate.The results show that when performance commitment is included in Mergers and Acquisitions transactions,the value-added rate of the target enterprises issued by the evaluation agency will be higher;The higher the performance commitment,the higher the value-added rate;Two-way performance commitment has more significant impact on the evaluation of value-added rate than one-way.Compared with cash compensation,stock compensation payment improves the appraised value and value-added rate of the target enterprise.Under the diminishing marginal utility effect,the simultaneous existence of two-way performance commitment and stock compensation payment has a smaller impact on the assessed value added rate than the sum of their separate existence.
Mergers and AcquisitionsPerformance commitmentAssessing value added ratesShare compensation
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