Measuring the impact of merger and acquisition on China's information technology industry

Abstract

The purpose of this paper is to determine the impact of mergers and acquisition on China’s IT firms and to make a reasonable conclusion as to whether the market reaction to M&A’s is good or bad. 99 acquirer firms on the Shanghai Stock Exchange and Shenzhen Stock Exchange between 2008 and 2012 were randomly chosen for this study. The Market model and Cumulative Abnormal Return (CAR) were used in this paper to determine whether China’s IT firms’ value can be increased or decreased through M&A and whether China’s IT industry market is semi-strong efficient.