The Economic Policy Uncertainty and Long-term Performance of M&As

M&As are important to improve resource allocation and transform development models. Research on the relationship between economic policy uncertainty and performance of M&As is useful for economic development. This paper uses M&As of listed companies during 2011—2016 as a sample to deeply explore the impact of economic policy uncertainty on the long-term performance of M&As. The results showed that the stronger economic policy uncertainty, the worse the long-term market reaction after M& As. The mechanism test found that with the economic policy uncertainty growing, the possibility of signing a performance commitment agreement was decreasing, which reduced the long-term market reaction to M&As. In the further analysis, it could be seen that management shareholdings would alleviate the negative impact of economic policy uncertainty on the long-term market reaction to M&As, while high degree of financing constraints could aggravate the negative impact of economic policy uncertainty on the long-term market reaction to M&As. The results showed that economic policy uncertainty is an important factor that affects the long-term market reaction to M&As. How to choose a reasonable timing of M&As and design effective performance commitments are important for M&As’ significance in resource integration and continuously optimizing the market economy structure.